Sega CD
Released in 1988, the Genesis (known as the Mega Drive in Europe and Japan) was Sega's entry into the fourth generation of video game consoles. In mid-1990, Sega CEO Hayao Nakayama hired Tom Kalinske as CEO of Sega of America. Kalinske developed a four-point plan for sales of the Genesis: cut the console's price, develop games for the American market with a new American team, continue aggressive advertising campaigns, and ship "Sonic the Hedgehog" with the Genesis as a pack-in game. The Japanese board of directors initially disapproved of the plan, but all four points were approved by Nakayama, who told Kalinske, "I hired you to make the decisions for Europe and the Americas, so go ahead and do it." Magazines praised "Sonic" as one of the greatest games yet made, and Sega's console finally took off as customers who had been waiting for the Super Nintendo Entertainment System (SNES) decided to purchase a Genesis instead.
Sega
In 1990, Sega launched the Game Gear, a handheld console, to compete against Nintendo's Game Boy. The console was designed as a portable version of the Master System, and featured more powerful systems than the Game Boy, including a full-color screen, in contrast to the monochrome Game Boy screen. However, due to its short battery life, lack of original games, and weak support from Sega, the Game Gear did not surpass the Game Boy, selling approximately 11 million units. Sega launched the Mega-CD in Japan on December 1, 1991, initially retailing at JP¥49,800. In North America, it was renamed the Sega CD and launched on October 15, 1992, with a retail price of US$299. It was released in Europe as the Mega-CD in 1993. The add-on greatly expanded the potential size of Genesis games and upgraded the graphics and sound capabilities with a second, faster processor, vastly expanded system memory, a graphics chip that performed scaling and rotation similar to Sega's arcade games, and an additional sound chip. The Mega-CD sold only 100,000 units during its first year in Japan, falling well below expectations. However, Sega had success with arcade games; in 1992 and 1993, the new Sega Model 1 arcade system board showcased Sega AM2's "Virtua Racing" and "Virtua Fighter" (the first 3D fighting game), which played a crucial role in popularizing 3D polygonal graphics.