Unlike the Gamecube and Xbox, which used DVD-like discs but just weren't licensed as DVD players (though Xbox later sold a "DVD Playback Kit" meant to cover licensing fees), Dreamcast's GD-ROMs were closely based on standard Compact Disc technology, just with dual-layer discs.

Upgrading the hardware would've increased costs considerably, GD-ROMs were meant to be a lot cheaper than the still very new DVD technology. Tech that did get cheaper by the time the PS2 hit the market nearly two years later, but Sega wanted to be early.