Part of Sega's problem has always been that they were never focusing their resources on a single platform and poor managing led to them trying to bilk money out of consumers. See Sega CD and 32X as prime examples, the Sega Saturn being out while the Genesis was still getting games didn't help either. Also, competing with the GameBoy using a giant brick of a device with a shitty screen that used 8 AA batteries was such a bad idea.