In terms of hardware design Sony got it right in the PS1 and wrong in the PS2, Sega got it wrong in the Saturn and right in the Dreamcast. The Saturn probably has more games that I'd want to play than the Dreamcast though.
Piracy killed the Dreamcast, every single console out there could play pirated games when kalisto released their boot cd. After they fixed the problem in new consoles the PS2 hit and demand for new consoles dropped to zero.
Actually, back during the Dreamcast days, Sega (the old Sega) put out an open letter to the community (which I swear I still have a copy of somewhere), that stated that they were not concerned about piracy, that's why they didn't put any security within the system itself, because they did not feel that piracy was a threat considering that most of the general public is made up of consumers that had no idea how to bootleg a Dreamcast disc in the first place. Secondly, they said that the piracy scene only served to advertise the Dreamcast by word of mouth. And lastly they were very supportive of the homebrew scene and if I recall correctly, lended a hand in the Linux port, and I believe there was even going to be a QNX port at one time. Sega was very eager to see people write their own code on the hardware and apply them to all sorts of uses, running factory machines included.
Another side note to mention would be that there are still countries out there that will not allowing ruling against such piracy sites as Pirate Bay, and their economy is still doing fine on top of that.
Here is one recent example of this:
http://www.osnews.com/story/27541/Dutch_courts_overturn_Pirate_Bay_blockade Lastly, when ever I see an independant, non-biased, non-corporately funded investigation from government in regards to the effects of piracy upon the American economy, time and time again they insist that it isn't doing damage, just as recordable 8-tracks, 16-tracks, beta, and vhs did not pluger the market in the 80's.
Oh, and don't ya just love how Disney bought the rights to material out of public domain, and how nature can now be patented so long as it is modified, as in can't reproduce seeds so to lead to another illegal monopoly, or how... oh never mind.
