Dreamcast
Released in 1988, the Sega Genesis (known as the Sega Mega Drive in Japan, Europe and Brazil) was Sega's entry into the fourth generation of video game consoles. Selling 30.75 million units worldwide, the Genesis was the most successful console Sega ever released. The successor to the Genesis, the Sega Saturn, was released in Japan in 1994. The Saturn was a CD-ROM-based console that displayed both 2D and 3D computer graphics, but its complex dual-CPU architecture made it more difficult to program for than its chief competitor, the Sony PlayStation. Although the Saturn debuted before the PlayStation in both Japan and the United States, its surprise U.S. launch—which came four months earlier than originally scheduled—was marred by a lack of distribution, which remained a continuing problem for the system. Moreover, Sega's early release was undermined by Sony's simultaneous announcement that the PlayStation would retail for US$299—compared to the Saturn's initial price of $399. Nintendo's long delay in releasing a competing 3D console and the damage done to Sega's reputation by poorly supported add-ons for the Genesis (particularly the Sega 32X) allowed Sony to establish a foothold in the market. The PlayStation was immediately successful in the U.S., in part due to a massive advertising campaign and strong third-party support engendered by Sony's excellent development tools and liberal $10 licensing fee. Sony's success was further aided by a price war in which Sega lowered the price of the Saturn from $399 to $299 and then from $299 to $199 in order to match the price of the PlayStation–even though Saturn hardware was more expensive to manufacture and the PlayStation enjoyed a larger software library. Losses on the Saturn hardware contributed to Sega's financial problems, which saw the company's revenue decline between 1992 and 1995 as part of an industry-wide slowdown. Furthermore, Sega's focus on the Saturn over the Genesis prevented it from fully capitalizing on the continued strength of the 16-bit market.
Sega CD
Retrospective reception of the Sega CD is mixed, praising certain games but criticizing its low value for money and limitations on the benefits it provides to the Genesis. "GamePro" listed the Sega CD as the 7th-worst selling video game console of all time, with reviewer Blake Snow noting that "The problem was threefold: the device was expensive at $299, it arrived late in the 16-bit life cycle, and it didn't do much (if anything) to enhance the gameplay experience." Snow went on to note, however, that the Sega CD did have in its library "the greatest "Sonic" game of all time" in "Sonic CD". IGN's Levi Buchanan criticized Sega's implementation of CD technology for the Genesis, noting, "What good is the extra storage space if there is nothing inventive to be done with it? No new gameplay concepts emerged from the SEGA CD—it just offered more of the same. In fact, with few exceptions like "Sonic CD", it often offered some of the 16-bit generation's worst games, like "Demolition Man"." Jeremy Parish of USgamer pointed out that "Sega was hardly the only company to muddy its waters with a CD add-on in the early '90s" and highlighted some "gems" for the system, but cautioned "the benefits offered by the Sega CD had to be balanced against the fact that the add-on more than doubled the price (and complexity) of the [Genesis]." Writing for "Retro Gamer", Damien McFerran cited various reasons for the Sega CD's limited sales, including the add-on's high price, lack of significant enhancement to the Genesis console, and lack of ability to function without a console attached. "Retro Gamer" writer Aaron Birch, however, defended the Sega CD and wrote that "the single biggest cause of the Mega-CD's failure was the console itself. When the system came out, CD-ROM technology was still in its infancy and companies had yet to get to grips with the possibilities it offered... quite simply, the Mega-CD was a console ahead of its time."