Stuart Campbell watches as a videogames giant charges the machine guns

As an example of the mighty fallen, it's pretty hard to beat Sega. Five years ago the company's name was synonymous with video games, its Mega Drive the all-conquering king of consoles. Six flop machines in a row later, though (culminating in the Saturn, now dead in the water barely two years after its launch), and only a tiny rump of the company survives, beseiged in a bunker deep inside Japan muttering darkly about the old days of the Emperor while millions of gamers pointedly turn their backs. (Sega's total European sales last year were just £60 million, down from £600 million in 1993.) It's perhaps fitting, then, that the company has just announced what amounts to an all-or-nothing final kamikaze assault on the games market, in the shape of their new Dreamcast console.

Kamikaze? Well, yes. Having lost hundreds of millions of pounds in the last couple of years, Sega is playing the punch-drunk Las Vegas loser and staking pretty much everything on this last roll of the dice - it's unlikely the company could survive another disaster on the scale of the Saturn, so if Dreamcast doesn't sink the Playstation (or at least make a pretty big hole in its hull), when it's launched this November, Sega's days as a hardware manufacturer will almost certainly come to an end.

As doomsday weapons go, the Dreamcast certainly sounds pretty scary. It's a 128-bit machine (a rudimentary rule-of-thumb guide to the power of a games machine - the Playstation is 32-bit, the Nintendo 64, unsurprisingly, 64-bit), with a central chip that's 10 times faster than the Saturn's and, theoretically at least, more powerful even than current arcade hardware. The very latest in PC 3D graphics technology has been employed, and indeed the machine will use a version of Microsoft Windows as its user interface (raising the fearful spectre of a games console that crashes like a PC). A modem for online play will be built-in, and the most innovative feature is the memory card, which plugs into the controller to save your game progress just like the current PS and N64 versions, but will also function as a tiny Game Boy-style portable console in its own right.

The mystery, though, is why Sega is bothering. Traditionally, the games business makes next to no profit on hardware (indeed, it's already widely believed that the company will actually be selling the new machine at a loss from the off). All the money comes from software, an area in which Sega's strength has never diminished - Virtua Fighter 3, widely touted as the machine's flagship launch game, is generally considered to be the pinnacle of fighting games, and Sega's racing titles are legendary - yet in refusing to stick to what it does best and continuing to fight a battle that most observers believe to be already irretrievably lost to Sony, it looks disturbingly like the embattled old warhorse has passed up the chance of economic rebirth (as a publisher of games for other people's hardware) and elected instead for the likelihood of a glorious and honourable corporate suicide. Whichever way, it's putting its trust in the divine wind.

XI

(Playstation, Sony, £35)

There's been a real renaissance in the world of console puzzle games lately (pioneered by Kula World on the PS and the N64's innovative and under-rated Tetrisphere), which is a real shame because puzzle games never sell worth a bagful of dried-up bogies and it's always sad to see stuff more interesting than the usual non-stop parade of fighting and racing games (see below) go to waste. Sadly, as long as games cost £35 and upwards, that situation's unlikely to change, which is bad news for lovely little efforts like this. Xi (pronounced "Sai") is a curious, pretty affair, in which you roll dice around on a grid by walking around on top of them in an attempt to join together multiples all showing the same number on the face. Grasping the principles takes seconds, and the simplicity, fast pace and constant click-click-click of the moving dice draws you hypnotically into the kind of glazed, abstract trance state last induced by Tetris itself. The one-player game is slightly thin, but the four-player battle mode is excellent headspinning chaos.

BIO FREAKS

(N64, Midway, £60)

Still, back to business, and Bio Freaks is the latest attempt at providing the N64 with a decent fighting game, some 18 months into the machine's life. It wouldn't be saying an awful lot to reveal that it's the best effort yet, but in fact there's a lot here worthy of commendation. The combatants are equipped with big guns, jetpacks and force shields in addition to the usual array of fancy fighting moves, and battles are a lot joustier than you'll probably be used to, which is a nice change. Being able to hack your opponents' limbs off and take them on with one arm and a blood-dripping stump is a nice touch too. Mm.

COLIN MACRAE RALLY

(Playstation, Codemasters, £45)

Codemasters' last attempt at a race game was the hugley popular but massively awful TOCA Touring Car, and most observers were expecting a simple rehash with new graphics for this licence. What you get, though, is an altogether more engaging racer, with handling that's realistic enough to be convincing without sacrificing playability, and a wide range of entertaining and picturesque rally courses in place of the ugly and tedious tracks of TOCA. Most entertaining of all, though, is the training section, where the man himself guides you through this most nerve-wracking and exciting of sports with all the hyped-up exuberance of Leonard Nimoy on Valium.

AYRTON SENNA KART DUEL 2

(Playstation, Sunsoft, £45)