[1] The GD-ROM was created in response to developers exceeding the typical 650 MB storage capacity of the CD-ROM; while DVD-ROM would have addressed this limitation, implementing its then-new technology would have made console production cost prohibitive.

[1] Along with the format's general novelty, the extra capacity also had the theoretical benefit of curbing video game piracy,[3][4] a major concern of CD-based consoles that was validated by its rampancy on the PlayStation.

[8][9][a][b] A hacker group self-named Utopia released their exploit in June 2000, having discovered that they could replace the visual data with Dreamcast code, enabling games burned onto CD-Rs to run on the console without any modding;[8][12] boot discs were initially used to facilitate this effort, but hackers subsequently discovered the ability to have burned games self-boot without the need for a boot disc.

[12][14] Sega initially responded by aggressively pursuing cease and desist orders against online marketplaces selling pirated games, announcing the effort a month after the exploit's release;[7] the company eventually released a new revision of the Dreamcast hardware that removed MIL-CD support towards the end of 2000, closing the loophole.

[19] In June 1999, The Nihon Keizai Shimbun reported on the development of a DVD distribution system by Sega alongside Hitachi, Nippon Columbia, and an additional partner; one known planned use for it involved encrypted multi-title releases that were to be accessed via downloadable product keys.