So the Dreamcast was much less expensive than the PlayStation 2. Did you mean to say that rather than saying it was more expensive, or am I missing some detail?
This I think was one of the main reasons for the ps2 success. DVD players at the time costed hundreds of dollars and were often not that good. The ps2 as one of if not the best and with backwards compatibility so you had access to the huge ps1 library.
I managed an EB Games during the Dreamcast and ps2 launches. You can’t overstate the value proposition of the ps2 as a dvd player. It made the ps2’s extra $100 over the Dreamcast completely tenable.
The second biggest reason for the success of the ps2 over the Dreamcast was that EA Sports never came to Dreamcast. Sega made the 2k series to compensate and it was definitely a good try, with some 2k titles definitely better in gameplay to their EA Sports competitor. But none of the 2k series ever sold anywhere near EA Sports.
I wouldn't even call it "lite". The PS2 was, in terms of features, one of the best DVD players on the market at the time. Component video, DD/DTS 5.1 optical out, if you had a good quality CRT you didn't need anything better (though you might want to chip it to go region free).
It wasn't the price but the cost of production. Most consoles are loss leaders. Also the lack of backwards compatibility made the library so small compared to PS2.
Dreamcast was muuuuch cheaper to manufacture than PS2. Seems Sega finally learned their lesson from 32x and terribly complicated Saturn. Too little too late.
The lineup of early PS2 games was pretty weak but yeah, back compat with PS1 helped them a lot. Dreamcast was surprisingly strong out of the gate as console launches go.
The PlayStation 2 launch price in Mar 2000 was $299 (US market).
https://en.wikipedia.org/wiki/Dreamcast
https://en.wikipedia.org/wiki/PlayStation_2
So the Dreamcast was much less expensive than the PlayStation 2. Did you mean to say that rather than saying it was more expensive, or am I missing some detail?