I happen to own a Dreamcast and Xbox. I only got the Dreamcast once I heard that Sega was exiting the hardware business. For its time, the Dreamcast was the first console to offer arcade perfect games, which was not possible with the PS1 and Saturn. If you were an arcade gamer, the Dreamcast was a gamer's dream. Unfortunately once the PS2/Xbox/Gamecube came onto the scene, it was left behind in the dust. It just couldn't compete on the hardware specs, the games available on it, and the controller too.

Answering your question, Dreamcast was quite commonly found in KL between 1999 to 2001. Even the games were very easy to obtain, since you didn't even need to modify the Dreamcast in order to play "backup" games.

Xbox was also very commonly found around KL/Selangor. If a game shop sold PS2, it's also likely you'll find Xbox there. But it just wasn't as popular, since the PS2 had more games. That doesn't mean the Xbox was crap though. It had the best looking multiplatform games, you didn't have to worry about buying extra memory cards, and the exclusives, like Halo, Dead or Alive 3 or Panzer Dragoon Orta couldn't be played elsewhere.

As for the Gamecube? Well, back then, the popularity of a console was directly related to whether the console had pirated games. It's as simple as that. Since the Gamecube used proprietary minidiscs which wasn't commonly used, it took a while before piracy came to Gamecube. By the time it did, most people would have already owned a PS2 or Xbox. That's not to say there aren't Gamecube fans in Malaysia. It just means it's much less commonly sold in shops, which lead to much less people owning one.

Like I said, here in Malaysia, the popularity of consoles also happened to coincide with whether there was piracy on the system. So you can bet they had piracy on them. Most consoles like Saturn, PS1, PS2 and Xbox needed to be modified before you can run "backup" games. But Dreamcast can run them just fine without any modifications. This was probably one of the reasons game sales of original Dreamcast games were not good, since literally anyone can just copy their own games.

I suppose the criteria here is that the Dreamcast could handle most arcade ports with less compromises than Saturn/PS1. Some of the CPS2 fighters, like Street Fighter Zero 1 and 2 were very good ports, but X-men Children of the Atom and Marvel Super Heroes weren't anywhere near the arcade version. They had more frames of animation than the PS1 versions, but the framerate is not smooth.

I hear you on the 4MB Capcom games, but since the 4MB cartridge games weren't really available outside Japan, the availability is less common. I do have a Saturn with 4MB cartridge myself.

Dreamcast did host games that were not possible on the 32-bit systems, like Virtual On Oratario Tangram, Virtua Fighter 3, Street Fighter III. And Soul Calibur was a complete overhaul compared to the original System 12-powered arcade version.

As for the hardware, everything about the system was weaker than PS2. The processor, RAM, optical drive, even the GPU. However, I do agree that the PowerVR chip on Dreamcast is better than the PS2, especially in Anti-Aliasing. You can see it most clearly in Dead or Alive 2 and Grandia 2.

Dreamcast is not quite as powerful as Model 3 hardware, so that's not too surprising. What IS surprising was Sega's decision to outsource the VF3 port to Genki instead of doing it themselves. They tried to fix it somewhat on the North American release, including adding back some basic modes. Was it versus mode or something that was missing? Ultimately though, VF3 was not as memorable as VF2. VF4 went back in the right direction though.

You sold off your Saturn and PS1? I have the opposite problem, where I keep adding retro games everytime I go to Japan. I even started getting cartridge games for Famicom, Super Famicom and Megadrive!