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The Rise and Fall of Sega
jayintune writes "2old2play has a look into Sega's past, examining where they went wrong in the console wars. What did they do to lose their competitive edge, and how did they fall victim to the PS2 and Xbox?" From the article: "Sega started as a small business from which spawned a gaming giant. As with all great Empires, they eventually rot, crumble, and fall from their own ever-grasping hand. After the Genesis they tried to go in too many directions at once and spread their resources too thin. They knew they would have major competition from other game developers, but I bet when they started, they never imagined they would be their own worst enemy."
Had Sega not even considered, not for a single moment, the disaster that was the 32X (and to a lesser extent, conveniently skipped over the Mega CD) and instead concentrated on the Saturn, we could well still have Sega in the running today. Sega post-Mega Drive (Genesis) had no real focus; if they had really tried, they could have stayed in the running against Sega (it was, after all, their market with Nintendo to lose). Souring both customers and retailer's pallets, they really were the architects of their own destruction.
It would have helped a great deal had Sega known how to market at all. So many great computer/gaming companies are prone to this: Sega, Acorn, Commodore, SNK...
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Basically this is one guy ranting about his childhood love of the Genesis and his opinion over the various mistakes Sega has made. It's just one page, no pictures, no research, and not really well-written. It's basically some guy's blog post.
Which isn't to dump on it for having those attributes, but don't expect anything like journalism.
The Dreamcast was pretty much a done deal before Xbox hit the market. It sounds like another case of "Oh, Nintendo doesn't matter in the history of video games because they r teh kidd1!" SEGA failed because the PS1 and PS2 overhyped, and Nintendo got out of the CD add-on game early, leaving the SEGA CD to rot in a market that didn't exist: "People who want a $100+ add-on for a system that didn't have Mario RPG, Chrono Trigger, Final Fantasy and Donkey Kong Country." SEGA then took the rest of their money, and instead of saving it for the next gen, they decided to kick start a new gen early twice in a row with the Saturn and the Dreamcast. These, as I mentioned before, were killed almost exclusively by Sony advertising and promoting the PS1 and PS2 as machines more powerful than God.
Nintendo had their own fanbase that didn't leave them and didn't buy into the "mature games" fad, mostly because they were actually really young, or really liked FPS games, because the N64 basically only had FPS games and kids games, so that's why Nintendo's still here. That and Game Boy. It was just enough to let Nintendo try again with the Cube, where they got more kinds of games, almost killed the kiddy image, and then still got third place thanks to Microsoft who stole all the FPS games other than Timesplitters (because Free Radical are Nintendo fanboys at heart).
Born to Play
It seems a little bit of an overstatement to call sega an empire when they never really dominated the market at any one time. Sure they were neck-and-neck with nintendo in the Genesis/SNES years, which was also one of the best console rivalrys of all time. But none of their other systems saw the same global appeal and they certaintly never did anything to monopolise the market as nintendo had with the NES in the 80s.
I believe that the Saturn was their downfall. The console was excellent and quite powerful. What they failed to do was market it properly. They charged $399 for it and felt that was justified because you also got three games with it. Sony saw an opening and sold their console for much cheaper and people gobbled them up. The Saturn may have been a better system, but it wasn't marketed the right way. The other thing the Saturn suffered from was that it was complicated to port games to it because of the hardware used. Sure, it made it superior in rendering and all that, but it also made it unfriendly to those third party guys writing for it. The Playstation was easier to deal with.
:) Heck, I still have my Genesis!
In the end, Sony took a foothold that eventually crushed Sega. The Sony name became so big in the console world that years later, then the Dreamcast arrived a full year before the PS2, many gamers said, "We'll wait for the PS2." Wow! That shows you how hard Sony got a foothold. And we all know the rest...
Personally, I am sad that Sega isn't in the console wars anymore. I still think they were the best. I still have my Dreamcast and Saturn.
"Never give up, for that is just the time and place when the tide will change." -Harriet Beecher Stowe ^_^
When your most loyal fanbase is confused regarding the products you sell, you have a very serious problem. Sega found this out the hard way.
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When I was younger, I'd see Sega commercials on TV, but I never saw much in the way of games that were truly interesting. Looking back, there's still just a handful that were released, and many involved the myriad "peripheral-crazy" systems. I was mildly interested back in the Genesis days, and there were some cross-platform games that were genuinely better on the Genesis. But that was it, for me, until the Dreamcast.
In hindsight, I personally think the Dreamcast could've done very well if for 2 things -- Sega had added another thumbstick to the right side, and they hadn't thrown all their money and goodwill away in the mid 90's. It's still a damn good system, and given the short amount of time it was on the market it has a surprising amount of good games. But given the bad timing and the lack of popularity of its previous systems, it's not surprising that even a good console fails.
SNES came out in 1991, not 1994.
I think it comes down to two things:
1) Sega was their own worst enemy. With the release of the Sega CD, then the 32X and the Sega Saturn no one knew what worked with what and those that bought the Sega CD probably felt stupid when they saw the Saturn. Sega splintered their own market by trying to make Genesis into a wanna be PlayStation. Nevermind that the Saturn itself seemed poorly supported and thought out. The upgrade path should have been Genesis -> Dreamcast, but Sega farked that up pretty good.
2) Sony, the original PS and their PS2 bullshit. Sony piled on the type about the Emotion Engine and the PS2's rendering abilites (note that it was Microsoft and not Sony that made the claim about rendering Toy Story level graphics in real time). The Dreamcast sold well initially and Sega couldn't keep up with demand, but it lost steam after the PS2 announcement and, if I recall, games were hard to come by in the first year. Sega just didn't have the financial strength to support Dreamcast after the failures of the SegaCD and Saturn and it is my understanding that they took a chance with the Dreamcast and the chance didn't pay off. You can still find many used Dreamcast units at your local EB Games store that were traded in for PS2s.
Sega Sammy's arcade and home consumer products were actually boosting a disapointing pachinko buisness.
I, as many it seems, was dissapointed when Sega pulled themselves out of the console business. They really shot themselves in the foot for years (starting with the Saturn). It's sad, but such is life.
Regardless, I thought the Dreamcast was a kick ass system for what it was. I still have mine, and its still in active duty. It had some cool games. Power Stone is still a blast with me and my friends, and Grandia II I still consider the best RPG I've ever played. It'll be with my in my dorm again next year as well, just gotta find more controllers that work. Hell, it might even surpass my PS2 in lifetime.
"The upgrade path should have been Genesis -> Dreamcast"
I don't think it's wise to wait ten years between console roll outs. They messed up with the CD/32x/Satrun but something should've come between the two.
To this day people think the PS2 is lightyears ahead of the gamecube with graphics capability due to hype and marketing.
Truth be told real game makes who write hear state that the gamecube has the best graphics and some games look better on the gamecube. Sony knows how to hype.
However I think the ps3 might go the way of the 3do. Wii is likely to be a hit
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I loved SEGA Channel. It exposed me to lots of different games I never would have played otherwise, such as the "Road Rash" series.
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I think the writer of the article failed to depict what really marked Sega's doom.
1. SEGA FAILED TO LISTEN TO THEIR CONSUMERS DURING THE TRANSITION TO 16 TO 32 BITS
2. EXTERNALITIES FINISHED SEGA
Let's analyze Sega's success during the 16bit era:
* Successfully executed a 1st moving advantage move: By the time Nintendo came out with the SNES, Sega was developing their 2nd Generation software (Sonic, Shinobi 3, Madden, etc.). Let's be realistic, their 1st gen stuff (Altered Beast, Super Thunder Blade, Golden Axe was very very bad, they were basically technical showcases. No exciting gameplay whatsoever.) The big exception is Phantasy Star II. It served the purpose of turning heads.
* Tapped on the American thirst for high end Sports Simulations: EA's lineup (Madden, college and other franchises) were the start of advanced sports franshises (The NES offerings featured many Super Deformed characters, other than Tecmo's entries, there were no serious sports on the NES).
* Started the successful bashing of Nintendo: While Nintendo NEVER acknolwedged Sega as a competitor (Big example: Nintendo did not Advertise on any Videogame publications, they stuck to Nintendo Power), Sega exploited with "Sega Does what Nintendon't" campaign, the "Blast Processing" campaign against the SNES (which was all Bull... a good lesson that has been applied by Sony in the past generations). This set up the precedent that you can win or slow down a platform on pure marketing speculation.
* Capitalized on a Mainstream Platform: The SNES featured a slower more processor that was more tailored for games, while the 6800 on the Genesis was a more general-purpose and well known platform- This allowed many western developers from Amiga and Commodore to jump and put out impressive software - up to that point, many people thought that American/European developers were not capable of putting out quality products.
* Played ball with 3rd parties: This is partly Nintendo's own making (Read "Game Over"). Once Sega became a "friendlier" player with 3rd parties, the "crown jewel" developers started publishing games on the Genesis. Nintendo managed to hold off Capcom on Street Fighter II (The main Reason why the SNES caught up with the Genesis), but ultimately SFII made it to the Genesis.
After all this success, it was a dogfight, Sega started preparing for the next generation, and Nintendo tried to defuse Sega by speculating on a Nintendo CD (The Phillips/Sony debacle that interestingly was the root of the creation of the Playstation)
At this point Sega put out probably their best technological lineup (examples: Vectorman, Treasure's Gunstar Heroes, Sonic 3 etc.) but Nintendo had the goves off with Starfox, FFIII, the upcoming Donkey Kong, etc. Sega thinks they can replicate 1st mover advantage with a CD platform. Sega CD comes out, and other than Silpheed and Sonic CD and Starwars, the platform is plagued with FMV Crap. So they started developing a next gen 2d platform (Saturn). (ERROR 1: Instead of looking at the future, they decided to fight Nintendo on 2D - They didn't see Virtua Fighter at the arcades???).
At some point during Saturn's development, the biggest mistake is made. For some reason somebody thinks that they can release an 32 bit "add-on" to capitalize on the Genesis installed base. The 32x is born. Sorry Sega, no add on has been successful!!! (Interestingly, some people have not learned this lesson yet; read: Microsoft's Xbox 360's HD-DVD rumored add on).
At this point, the consumer must be very confused. Should we wait for Saturn or buy 32x??? I would have paid money to see those marketing staff meetings.
Final Nail in the coffin: Sony unveils the PlayStation (externality) and Sega rushes to add 3D capabilities to their pure 2D platform. With an overpriced platform that is very hard to program for, Sega manages to release many beautiful games (some of which never make it to our shores). The rest is history, Nintendo blunders again by undermining 3rd parties and ignoring the media leap, and it's all Sony.
Let's hope that we have a dogfight again soon... we will stand to win like we did during the 16bit days.
Sega was NEVER a real contender, except for a very brief period in the early 1990's, and even then was only #1 in the US.
(note that it was Microsoft and not Sony that made the claim about rendering Toy Story level graphics in real time)
People keep on claiming this, but miss the truth. Yes, Sony never said the PS2 could render Toy Story in real time. They said it could render the cutscenes from Final Fantasy 8 in real time. Final Fantasy 8's cutscenes were about as complex graphically as Toy Story, so it's a completely equivilent claim.
Yes, Sony never said "Toy Story" but they might as well have. They claimed the same thing.
You're right, I forgot the timeline. The Genesis was released in what, 1989? Ideally Sega should have put more support into the Saturn and dropped the 32X/SegaCD concepts all together. I really don't remember much about the Saturn other than one game, Panzer Dragoon, and that fact that it was apparently extremely difficult to program wtih woefully inadequate developer tools.
I always thought Sega bailed out on Genesis too quickly. They had a giant usebase and were creating fantastic software. I think it was Donkey Kong Country that spooked them. That year they saw Genesis demand shrinking a little bit and knew Donkey Kong Country was going to be huge. Instead of making a killer Genesis application they pushed the 32X as a stop gap. Bad idea. They should have stuck with Genesis until 1996 and released a technically superior Sega system on par with PSX or N64.
I had a sega CDX, kind of a portable sega/sega CD in a rolled together unit (which by the way could play music for about half an hour on two AA batteries), enjoyed some of the games for it (Dark Wizard and Tomcat Alley were both good), but when the 32x came out I had one on preorder, went to the store to get it, halfway to the car noticed a sticker stating it would not work with the CDX. Though tempted to try it anyway didn't want to risk it, turned around, got my refund. Thought to myself what the heck was I doing spending this much on an obviously intermediate tech stage instead of the next thing coming around, saw that sega was trying to temporarily lure customers to this when it wasn't even their plan for more than a year at best. Never bought another sega product...
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I'm suprised nobody even mentioned that the Playstation, which was what killed SEGA, was originally a joint project with Nintendo to make a SNES/Super Famicon CD system to compete with SEGA CD. Nintendo saw how bad SEGA CD was doing and bailed on Sony, causing them to lose game developers who had already begun working on games for the new add-on(like Squaresoft's Final Fantasy 7). If SEGA never tried the CD bit then Sony would not be making systems today.
1) Dreamcast piracy: Sega said their systems were selling well enough, but the software wasn't. And since you could download and burn pretty much any game out there, that's probably not a surprise.
2) Shenmue: $20,000,000 on one video game. Still the record as far as I know. There was no way ANY game, especially for the Dreamcast, could ever have made that much money back then. This is seen by some as the biggest single reason for Sega's buyout by Sammy.
It was not the 32X, Saturn or Dreamcast that led to SEGA's fall in the console business. It was its policy: SEGA forgot that their best arcade games where 3D superscaler affairs (and later polygon affairs). Neither the Megadrive, 32X or Saturn could scale, rotate and polygonize graphics like the SEGA arcade boards did. At the time that 3D was all the rage, SEGA pushed 2D beasts.
What did the arcade player see when he hit the arcades? Space Harrier, Outrun, Powerdrift, Afterburner, Thunderblade, Galaxy Force, Super Hang On, Super Monaco GP, Virtua Fighter, Daytona USA (along with a stream of other mostly inferior 2D affairs). But any of those games really suffered as home conversions, because SEGA's home consoles could not afford the twin-68000 supercaler and polygonizer graphics of SEGA's arcade boards.
What SEGA should have done, instead of 32X, is to release a powerful home console with 2x68000 plus custom chips that could do all the effects of the arcades. Yes, it would have been an expensive console, but yet again it would be the only console that one could play a decent game of Outrun. And later they should have released a polygonal beast like the PS1.
SEGA did a similar mistake with Commodore: when the world was going 3D, both SEGA and Commodore insisted on powerful 2D graphics without any support for 3D. Meanwhile, the PC world got Wolfestein 3D and Doom, while the console world got PS1.
Nintendo did not do the same mistake. After their best console ever (the Nintendo SuperNES) which had a limited number of special 3D tricks (mode 7, superfx chip), they released a proper 3D console, the Nintendo 64, which had some awesome games.
As somebody who has owned and sold his PS2 (with about 15 games) and who has recently bought a Dreamcast (second hand with about 20 games) I can safely say that the Dreamcast kicks PS2 ass!
It's only sad that the last commercial games for the DC were created in 2001 or so.
I would have loved to see how a recent game developed for DC would compare to a recent PS2 game; I dare bet the DC's version would have blown away the PS2's.
I guess the most imporantly reason for Sega losing out on the (IMHO) inferior PS2 is the piracy; you could use burned CD's without any expensive hardware modification. They may have failed at marketing, but from what I can see they just didn't make enough money from the games to throw at marketing anyway.
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Sega has certinly fallen from where they are, but coming out here to Japan, all over Im seeing these Sega Arcades that seem to be pretty popular, AND big. Are they really on the ropes, or was the exit strategy of leaving Consoles just a smart business move (not being rhetoric, im seriously asking)
I wrote an article like this 6 months ago: The Downfall of Sega Part 1 and Part 2
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And now they even lose their great football game franchise because of the NFLPA's deal with Madden. That sucks, sega has a much better football game.
nothing
"It was the pinnacle of Segas Pax Romana."
Hmm it seems someone doesnt know what Pax Romana means. The console war was hardly peaceful , Sega was not on top and it has nothing to do with Romans.
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I loved the Master System, Genesis, Game Gear, and Saturn hardware as much as the next geek. But Sega is in a much better place now. Everyone's living room. May it always be so.
What really loved was the Games anyway, Now we can all live in perfect Hedgehogemony.
Oh, that was bad.
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It just seems to me that SEGA wanted to 'get rich quick' with their gaming systems. Offering system after system to the public, even though the systems weren't that good. If you think about it, they offered multiple systems that they new people were going to buy before the market got flooded with other companies such as Sony and Microsoft that they might not be able to keep up with financially and technologically.
...am I supposed to put something here?
Who the heck would greenlight $20 million for an RPG when the lead's only experience in that genre was the terrible "Sword of Vermillion"?
I think I'm going to do my own investigation and find out what happened on "the day. of the. incident.".
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is that Sega had a lot going for them, they did indeed lose their "focus", and when they did apply it well, in the DreamCast, it was too early. There was no competition and OMG, the controllers...
The DreamCast had crazy great capabilities, well beyond that of anything else in that gen, but people weren't ready to plunk down hard earned cash to make it happen. We had a DreamCast in our home, and we loved it. But can you imagine if the DreamCast came out when downloadable or online play was possible at broadband speeds? It would have been a totally different story!
The DreamCast was the first console to be able to hook up to the internet (for browsing or other things), and that was huge. But the bandwidth wasn't there to do anything really useful with it. If you could do anything even remotely comparable to Xbox Live with that thing, man, it would have been amazing how well that system would have lasted and performed in the market, I guarantee....
SEGA's biggest problem was releasing their next generation consoles too early. More than a few months jump just gives the competition too much time to build up the hype machine, even if the hype simply isnt true. Sony built up a fan base with the psx that caused fanboys everywhere to latch on to every word. Emotion Engine, Built-In hard drive, bazillions of textures, higher poly counts...in the end most of the hype ment nothing but people bought into it. In hindsight SEGA should have waited about a year, they lost the specs war but in alot of peoples minds SEGA was well on their way to winning the gameplay war.
The ps2 has never performed at the level the hype suggested, the good thing about this is that even the fanboys are a bit more jaded now. People want to see performance and quality, not just a spec sheet. This generation seems poised to be the one where gameplay finally wins out over hype. May the best console win.
..Those aren't the ones that kiled sega.
Imagine sony had said "nah, that final fantasy series by square doesn't look like something we can sell outside japan. NEXT".
This is what happened to sega. In japan saturn and dreamcast were kicking but. In the USA there were hardly any games for the saturn. I buy the console that has the games, I don't care who built it and what the hardwares power is, if it doesn't have the games I want screw it.
So when did Sega die exactly? Last time I checked they were still doing well as a software only/arcade business. I'll always have a couple Dreamcasts though, great consoles and where else can you play Samba De Amigo?
The point is the US market is the single largest games market in the world. Being #1 in the US qualifies you as a contender in fiscal terms, matters of taste are irrelevant.
SEGA Base
Essentially, I get from this that a lack of co-operation between the American and Japanese branches were it's biggest problem. (Oh, and Nintendo screwing them over with the Congress didn't help either.)
The Dreamcast would have had to have been a spectacular success to pull SEGA out of its financial doldrums, and the people at SEGA seemed to know it was a longshot (see the following article):
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had arcade perfect ports of Space Harrier and Afterburner, so did the Saturn. Arcades were dying in the states, only the fighting game crazy kept 'em breathing. Commodore's mistake (I assume you mean the Amiga32) was trying to sell hopelessly old tech at a high price because it had a CD drive attached. Sega's mistake was infighting, rushing their next gen console to get it out first, and trying to market the Dreamcast as hip instead of for the technological marvel it was.
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I think you are confused about what happenned to Commodore (by which, I assume you mean the Amiga line). The Amiga always had superior 2D graphics, from the start in 1985. The PC wasn't able to touch it until about 1993 or 1994, when VGA cards became ubiquitous in the PC scene. Even then, you were limited compared to what the Amiga could do, because the VGA card was essentially a frame buffer - any and all effects had to be handled by the CPU. The Amiga had the advantage of a parallel chipset - consisting of chips for graphic manipulations (mainly the blitter), chips for sound (Amiga had the best sound - 4 channel FM stereo as well as digital sample playback - since 1985), and the CPU. Also, there were two different types of RAM in the Amiga - regular and something known as "Fast" RAM. Fast RAM was typically used for graphics and sound, while the other RAM was used for the OS. The blitter allowed for some weird and wacky things, like having two different frequency screens overlayed on top of each other. Plus, the Amiga also had planar graphics (as opposed to the scalar architecture of VGA), which also allowed for some interesting effects.
With all that said, though, that isn't what led to the PC outpacing the Amiga (I doubt it was cause for the downfall of Commodore - I blame that on mismanagement of the company and bad marketing of their products) - what led to that was two fold: not using the fastest and greatest Motorola 68xxx processors for their machines (and not making it easy to upgrade to a faster processor), and not pricing the machines aggressively enough to compete with the PC. Sure, there were third party CPU and RAM upgrades available, but the whole Amiga line, both OEM and third-party hardware, was an expensive beast.
At the time (ie, 1993-1995), the Amiga 1200, 600, and 4000 were the real Amiga line. Unfortunately, only the 4000 had the horsepower to be really effective for 3D games, but not many people owned them. So, software publishers targetted most games and such for the 1200 and 600 (which was really a strange form of the 500 - it didn't have the AGA chipset). When Wolfenstein 3D came out on the PC, it stunned a lot of people, myself included. But don't kid yourself: Wolfenstein 3D was a 2D game at heart - for that matter, so was Doom, and Doom 2. Arguably, Quake was "2D" as well (from the standpoint that it didn't have hardware accellerated 3D graphics), but it doesn't count since the graphics were really 3D, just rendered in software. The first three games, though, all used a form of graphic rendering called "raycasting", which was a very ingenious method combining the Bresenham algorithm and sprite scaling to simulate a 3D rendered world, very quickly, using very optimized assembly code.
The Amiga certainly had the horsepower to render such a world - indeed, shortly after Wolfenstein 3D stunned the world, other programmers figured out the "tricks" and the Amiga got its share of raycast games - not as many as the PC world (which may have been a good thing), but there were a few nice ones made. What really changed is that it proved the PC capable of doing some really nice graphic effects. The capability was there all along (in both the Amiga and the PC, mind you), probably since the days of the Amiga 1000 and PCs with CGA graphics - I say this because a guy named John Kowalski proved you can get a 2 MHz 8-bit machine to do raycasting (the TRS-80 Color Computer 3 - 320x200 16 color mode), along with a host of other wierd and wild stunts that were absolutely unheard of back in the heyday of the CoCo 3 (ie, 1987-1990 or so). From this, another individual used his talent (Nickolas Marentes) to create a game based off the Gloom-3D code, called Gate Crasher. Yes - both of these projects came out around 19
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People keep on claiming this, but miss the truth. Yes, Sony never said the PS2 could render Toy Story in real time. They said it could render the cutscenes from Final Fantasy 8 in real time. Final Fantasy 8's cutscenes were about as complex graphically as Toy Story, so it's a completely equivilent claim.
Yes, Sony never said "Toy Story" but they might as well have. They claimed the same thing.
Render sure.. but at what frame rate?
"There are more things in heaven and earth, Horatio, than are dreamt of in your philosophy."
I'm not totally sure now newsworthy this article is. No, I am totally sure. It's not. As a personal anecdote it's an interesting read for the author's friends, I'm sure. As a pre-mortem eulogy for a company with a long and complicated history, marked with strange politics and even stranger bedfellows, this isn't news. It's almost entirely conjecture.
If you're looking for more information about Sega in all of it's many incarnations, take a look at http://www.sega-16.com/.
It has many articles on what various factors led to the downfall of Sega, as well as what made it so great and which games were worthwhile on all of the various systems (with a reasonable bias towards the Genesis).
I think that the single greatest achievement of the Genesis-era Sega was The Sega Channel. It provided me with years of entertainment as a rambunctious kid, and no facet of any system since that time has even come close to matching the sheer entertainment value you got for your monthly fee.