Sony's recent announcement of the PlayStation 2 and its DVD capabilities send shockwaves through the gaming community

Many in the industry were curious as to how Sega would counter Sony's plan to use the DVD format, (a considerable advantage) and according to reports from Japan, we could be looking at an answer.

The Nihon Keizai Shimbun (Japanese electronics trade paper) Thursday morning edition reports that late next month, development of an Internet/DVD distribution system will reach completion. The system, which should reach consumers early next year, is being co-developed by Sega, Hitachi Ltd., Nippon Columbia Co., and Hirano & Associates Inc. One of the system's known uses will be the release of discs containing multiple titles, which will then use a special encryption technology, allowing users to decode a particular title via downloadable software keys.

Not only will this go a long way towards preventing piracy, but it will also give Sega a number of options with regards to software packaging and promotional activity. Larger titles, as well as the inclusion of demos, movies, and other materials would be instantly pragmatic due to the increased storage capacity of the DVD format, which allows for 4.7 gigs of information per disc, nearly five times that of the Dreamcast's GD-ROM format.

This information puts a damper on recent rumblings, which claimed that Sega has been working on a new model that would feature an upgraded processor and some form of DVD technology, but does leave the door wide open for a number of interesting possibilities for the console.

Currently, Sega of America maintain that use of this peripheral will be limited to promotional activity in Japan, but one would have to wonder why a fully functional DVD drive, compatible with Dreamcast, wouldn't make use of the aforementioned features.

Courtesy of IGN.com