I did not see this news published in this forum and don't know if anyone are interested, but I quote here. Link: Sega pushed for Dreamcast compatiblity with the Xbox (Destructoid) personally I would have loved if this had happened...
Would it also have been controller compatible? Considering how Sega's ported most of their best work to Xbox/360 compatible, it seems Sega may have viewed the Xbox as the successor to Sega's desires as a game console.
The XBox S controller is practically the Dreamcast controller, dude. Right down to the slots on the topside of the controller; just more buttons and an extra analog stick. Microsoft just didn't want to have anything to do with a company that constantly lost money so they rejected Okawa's request, that's all. Still didn't mean that they couldn't release a DC-compatible system later on though. Oh Dreamcast, this world didn't get enough of you.
I fail to see how this would have somehow "saved" the Dreamcast. If anything, it'd have hurt it even more because then people could just buy an Xbox to play DC games. If anything, it may just have helped SEGA cut their losses a bit by selling and/or retooling their Dreamcast games.
That would have helped Sega, who were losing money on the hardware. =P And it would have let them keep making a few DC games, maybe, but I think the reason they chose the newcomer as a final opportunity was because there was no chance in hell they would do a similar alliance with Nintendo or Sony. Having said that, the gamit failed anyway. Shame really.
The DC tech would have lived on in XBOX, and a lot of the unfinished DC games may have been released. For example, Sega might have re-pressed Dee Dee Planet if the future of the platform was likely to live on a bit longer in the XBOX. Also, I wonder if this means Sega would have produced exclusively for XBOX.
Wait, what? Really? I've been after the last piece of the puzzle to softmod (the memory card) for a while, so I can play burnt games.