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Sega sues retailer for pocketing profits

Kmart allegedly owe Sega $2.2m on Dreamcasts sold. Paints an interesting picture

Sega announced a lawsuit against Kmart yesterday evening, because Kmart allegedly failed to pay some $2.2 million on Dreamcasts they received and sold through their retail outlets. The retailer took $25.9m worth of stock, and according to Sega, has skipped payment on $2.2m of it. According to Sega, the suit comes after repeated requests for payment. Sega claim to have stopped shipping Dreamcasts to Kmart for alleged nonpayment in August last year. Charles Bellfield, acting as a spokesperson for Sega in San Francisco, described Kmart's actions as an "ongoing, malicious lack of payment". Sega's worldwide sales of the Dreamcast number approximately 6.5 million so far, and Kmart accounted for less than 5% of the American sales last year. Kmart has made no comment on the suit, so we have no idea of what their stance is on the situation, but it was seem that as long as Sega can prove that the retailer agreed to pay then failed to, they will be in trouble. Obviously all of the information so far comes from Sega, which is an important point to take into consideration. There is a rumour afoot, for instance, that it was not Sega's decision to stop shipping Dreamcasts to Kmart in August, but a conscious choice by Kmart to stop accepting them. Related Feature - Sega to become platform-neutral, Team up with Palm

Source - Reuters