The problem runs a little bit deeper than just what happened in the 90's; Sega of Japan was an arcade-first company, used to designing new hardware on an 18-mon

The problem runs a little bit deeper than just what happened in the 90's; Sega of Japan was an arcade-first company, used to designing new hardware on an 18-month cycle, and able to count on a guaranteed market for new titles through their own locations. This tendency helped them make a lot of defining arcade hits in the 80's, but it became an Achilles' heel in all of its console efforts, with three different iterations of the SG-1000 series plus regional variations(Master System) too. When they hit big with the Genesis, they didn't learn to change their hardware strategy to match what the console market needed going forward, so the same mismanaged release cycle resulted, and in a market that was getting bigger and more expensive to stay in, with more and more of the development costs being weighted towards software technologies.