SegaNet became a short-lived internet service geared for dial-up based online gaming on the Dreamcastgame console. A replacement for Sega's original, PC-only online gaming service, Heat.net, it was initially quite popular when launched on September 10, 2000. Unlike a standard ISP, game servers would be connected directly into SegaNet's internal network, providing very low connection latency between the consoles and servers along with standard Internet access. Just over a month after launch, by October 27, 2000, SegaNet had 1.55 million Dreamcast consoles registered online, including 750,000 in Japan, 400,000 in North America, and 400,000 in Europe.
Online games on the Dreamcast initially allowed free access to their game servers, to be offset by SegaNet subscriptions and game sales. But with the demise of SegaNet, most games shut their servers down while Phantasy Star Online Ver. 2 charged a monthly fee, but was closed for the last time at the end of the year. There are some private servers still online that can be played with the following games: 4x4 Evolution, Maximum Pool, Phantasy Star Online, Quake III Arena, Sega Swirl (Using play by e-mail), and Starlancer.
SegaNet originally offered a $200 rebate with a two-year contract, to encourage sales of the Dreamcast. But due to pressure from PlayStation 2 and the announcements of the Xbox and Nintendo GameCube, sales of the Dreamcast continued to drop, and in July 23, 2001, Sega announced they would discontinue the service, causing this online service to last a short-lived life of 11 months. At this point, all subscribers were given the option to transfer their accounts to EarthLink.