Microsoft’s aggressive positioning of the Xbox brand took another interesting turn Monday with the official announcement of their Xbox All Access initiative.

For a minimum two-year commitment, Xbox All Access bundles the company’s Xbox Live Gold and Xbox Game Pass services together into one monthly fee in exchange for a free Xbox One S or Xbox One X console.

It’s a very interesting initiative to say the least – one that has the internet buzzing; however, as forward-thinking as the Xbox All Access deal seems on the surface, a quick look back throughout the pages of gaming history shows that the idea is no where near original.

Sega tried the same thing with the Dreamcast.

Back in 2000, Sega was struggling to create a beachhead for its Dreamcast system against the oncoming tide that would be the launch of the PlayStation 2. While Sega had enjoyed a strong launch in September of 1999, by spring of 2000, the anticipation for Sony’s second-coming was already starting to hit a fever pitch, and that captured mind-share was already starting to impact the Dreamcast’s momentum.

One of the advantages that the Dreamcast had which Sega was hoping to leverage, was the fact that every single system shipped with a 56k modem built into the unit. It was the first of its kind and Sega was looking to make online play a cornerstone of the Dreamcast experience. In early 2000, as the attention of many gamers looked towards PlayStation 2’s imminent arrival, Sega was banking on the novelty that the first dedicated online gaming service for consoles would provide.

Sega Online was poised to finally allow true head-to-head online play for console players in a variety of groundbreaking titles, such as: NBA 2K1, NFL 2k1, Quake III, Sega GT, and a host of other titles.

Sega was so confident that the promise of online gaming would be so appealing to consumers, that they devised a deal to provide players with free Dreamcast systems, in exchange for a two-year commitment to their Sega Online service.

The fantastic, but long-defunct, publication Next Generation covered Sega’s bold plan in their May 2000 cover story: Dreamcast: Now it’s Free.

The article (which is a fascinating snapshot of a crucial juncture in the history of the video game industry) traces the roots of the free

hardware in exchange for service commitments concept back to Brad Huang, a consultant with close ties to Sega’s President at the time, Isao Okawa.

“Huang saw the future of gaming as moving increasingly online, and knew just how to position Sega at its cutting edge. His idea – giving away hardware in exchange for signing up with an online service – was actually not any different from the successful strategies of PC-based internet services, but it took a bit of time for Sega to be convinced – for one thing, other consultants, such as Price Waterhouse, weren’t convinced.”

Huang goes on to explain in the interview that other consultants had the idea of internet strategy being little more than having a web page in existence, while he envisioned a bold new vision for the direction that gaming could go thanks to the power and potential of the internet.

“The model was very simple: accept wholeheartedly that the future of gaming is content based, not technology based, and that it will move increasingly online – then dedicate Sega to giving gamers what they want.”

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Sega went on to pioneer online gaming through their Sega Online service and proceed to offer consumers a free Dreamcast to anyone who agreed to sign up for two years of Sega Online – just like Microsoft is doing now with Xbox All Access.

It’s fascinating to watch history repeat itself.

It’s not just because Microsoft is taking a page out of Sega’s old playbook – it’s because the impending market conditions of today are eerily similar to the conditions  that lead Sega to make this move eighteen years ago.

In early 2000, Sega was desperate to create some sort of bulwark to stem the inevitable tsunami that would be caused – not only by the release of Sony’s PlayStation 2, but by the future release of the next system from their old rival, Nintendo, in the form of the Gamecube. Beyond those two formidable opponents however, a new challenger was approaching. A genuine titan that sought to claim their share of the lucrative gaming industry pie – Microsoft.

Just as Sony and Microsoft’s launches forced Sega to make drastic, albeit incredibly innovative moves, so too does the impending arrival of new titans force Microsoft into the exact same position today.

Of course I’m talking about the impending arrival of Google and Apple into the gaming market.

While we believe that Microsoft has done a far better job of  positioning themselves to fight such formidable adversaries than Sega was at this point in 2000, we also can’t help but believe that the announcement of Xbox All Access is part of an effort by Microsoft to create their own bulwark against Google and Apple.

As Huang so accurately predicted almost twenty years ago, gaming has become content based, and more importantly, service based, rather than technology based.

This is where the battleground for next generation gaming truly lies: the ecosystem of content.

As we have stated previously, Microsoft is preparing to transition the perception of the Xbox brand away from being about hardware, to being about Xbox as a service that can be played on any device. Offering consumers a free piece of hardware is a Trojan Horse designed to get consumers dependent upon the Xbox service ecosystem. And once a consumer is committed to an Xbox or a PSN ecosystem, they are much less willing to break away to try something new.

However, while Microsoft has made strides in preparing themselves for the coming next-gen battle as far as the technology behind their services goes, the most important element – the games themselves – are still lacking.

Unlike Sega, who experienced a renaissance of creative output during Dreamcast’s run, Microsoft has struggled to continuously produce meaningful console exclusives throughout the life of the Xbox One lifespan. While there is hope on the horizon in the form of recent studio acquisitions, it will be a number of years before we begin to see the fruits of those labors.

As great of a deal as Microsoft’s Xbox All Access is on paper, that deal will begin to look pretty sour in the face of exciting new releases on other platforms.

Microsoft’s foray into offering free hardware for service commitments with Xbox All Access draws a riveting parallel with Sega’s strategy from 18 years ago.

In the case of Sega, their concept of service based gaming was too far ahead of its time for the public. They eventually failed to stop the onslaught from their competition, and the Dreamcast ceased production in early 2001.

As for Microsoft, while it’s obvious that they have been inspired by Sega’s move from so long ago, and there are many coincidences between the challenges faced by both companies, that doesn’t mean that history has to repeat itself.

Time will tell if Xbox All Access will create a strong enough rampart to defend themselves against the fiercest competitors the industry has seen yet. For now however, Microsoft’s announcement of Xbox All Access provides a stunning reminder of just how influential the Dreamcast continues to be.