As someone who owned a dreamcast and stayed in line all night for a PS2, I can say that the DVD player functionality was HUGE. It was many, many people's first DVD player, and priced so that the game console was nearly 'free' on top of it.

The Dreamcast still got played post-PS2 purchase, but not much - fighting games, mostly. PS2's catalog was very, very strong and the combo just dominated.