Sega introduced the GDROM Gigabyte Disc format in 1998 for use in its then-new Dreamcast gaming console. At the time, DVD drives were way too expensive to justify loading one into a console, so Sega decided to use modified CD technology from Yamaha to achieve gigabyte capacities. A side-effect which helped Sega win developers was the proprietary nature of the GDROM system. Developers could release titles with certainty that it wouldn't be possible to simply burn off copies in a CD recorder, since only registered Dreamcast developers with special hardware could burn or even read GDs on a normal computer.
Flash forward two years. It is found that, with the right data, Dreamcast can be bootstrapped from the second session of a standard CDROM. Shortly following the release of the Dreamcast GameShark, an unlicensed CDROM product, Utopia's loader ISO was released. Upon initial inspection, it uses the same reset-and-load trick that the GameShark uses to get itself running. Combined with the news of the Dreamcast Debug Handler, this only opens the door further for third-party innovation on the console.
The real question is, will this third-party "innovation" make or break the Dreamcast? As a console manufacturer, Sega depends on the revenues generated by developer licensing and game sales to make up for losses generated by low-priced console sales. If what makes the Dreamcast special isn't so special anymore, will it be the final nail in its coffin?
One would hope that Sega would try to harness some of the creative talent on the Internet and create a developer community of its own, akin to what Sony did with the Net Yaroze. Well, that's what you'd hope. In reality, however, Sega has been rather hostile to unlicensed third-party code running on its consoles, as evidenced by its lawsuit against Accolade.
I'm sure that at this very moment there are a few designers at Sega sitting at their desks wondering, "where did we go wrong with GDROM?" Although history has shown that virtually no software copy protection scheme has gone unbroken, Dreamcast put up one hell of a good fight. Now that the secret is out, I hope Sega can see the opportunity presented to them in the distributed development community that is the Internet. I, for one, would gladly pay for a Sega-endorsed version of BSD for the Dreamcast.
If Sega can see through the unfortunate financial consequences of these third-party coders, they'd notice that they have the opportunity to create the next Commodore 64 with the Dreamcast. What made the C64 such a runaway success was that anybody could program it, and everybody had one. It allowed everyday people to learn about the exciting world of the microprocessor without draining their wallets. Hackers would spend nights on end writing machine language to push their 64 to, and even past the limit in strange new ways that Commodore never intended. I truly think that Sega can dominate the set-top box market by releasing an open console. In a world full of thousand-dollar PCs, the world needs another Commodore 64 to lighten things up.
But, at the present time, we've got the keys to the kingdom. I just hope we can use them responsibly.