I bought one at launch, and I distinctly remember being blown away by its compact size, its heft and its power (in terms of graphics). Its catalog of games also blew me away, thanks to titles like ChuChu Rocket!, Jet Set Radio, Samba de Amigo, Shenmue and Space Channel 5, among others.
Tadashi Takezaki, Sega's "head of project implementation department, president's office," talks about why the system was such a flop--when it comes to sales, at least--in a just-published article at polygon.com. (Which, it has to be noted, is based around quotes pulled and translated from a recent issue of Famitsu.)
In that piece--penned by Kevin Gifford, proprietor of what used to be one of my favorite gaming blogs, magweasel.com (it's rarely updated these days)--Takezaki shares that "when [Sega] developed the hardware, we looked over the mistakes we made with the Saturn and completely reworked our approach.
"We did our best to make the console approachable to a mass audience--from the system's design and coloring to the name itself," he adds. "As a result, we went with a compact, simple design with a warm color scheme, something completely different in look from older Sega systems."
As for why the system failed, Takezaki says "it was because we were forced into a discount war when we were already losing money on system sales. Sony [whose PlayStation 2 came out March 2000 in Japan] was part of the team that developed the DVD standard, and they could develop a system around that completely internally with their own chips."
Sega, in the meantime, "was buying everything from outside companies, so it was at a distinct cost disadvantage," he adds. "We couldn't easily cut costs on manufacturing, the software wasn't selling the numbers it used to, and then we were forced to discount the system."
To read more well-worth-reading Takezaki quotes, check out the full article at polygon.com.