Sega Vs. Sony: Pow! Biff! Whack!

In the cutthroat video-game business, this Christmas season features an epic shoot-'em-up between Sega Corp. and Sony Corp. You could call it the X-mas Deathmatch--except, almost everyone agrees, the players are poorly matched. Sega is the struggling underdog, and this could well be the company's last great battle.

In fact, earlier this year, many analysts had already given up on Sega. Through much of the past 18 months, the buzz surrounding Sony's upcoming PlayStation 2 game console was so thick you could slice it. Sales were roaring in Japan, and its Oct. 26 U.S. launch was sure to be a knockout. Sega's Dreamcast machine, meanwhile, was posting decent sales, but never stole the thunder from older, more primitive consoles from Sony and Nintendo Co.