Sega announced that it is likely to end production of its Dreamcast videogame console and will not produce a next generation game platform.  Thus the consolidation of the hardware end of the video gaming industry continues with just Sony, Nintendo, and soon-to-be new entry Microsoft left standing.  Sega is currently in talks with Sony to create software for the new Sony Playstation.  Having created Sonic the Hedgehog and numerous other successful games, Sega's strength is definitely concentrated on the software side of the business.  In the past two years Sega has lost over half a billion dollars trying to compete with the big boys.

How will the shakeout in videogame platforms affect the rest of the pop culture products industry?  As long as there are a variety of independent software companies designing new games for the various platforms, consolidation of platforms will probably not reduce the flow of new ideas from the software, which has become an important source of concepts for action figures and other licensed products in recent years.