I still think that MS has something to do with Sega leaving, besides the obvious three's a crowd.
Here's my reasoning;
-Back in the nineties, MS worked with Sega to create a PCI Saturn card for PCs running Windows -- I was tempted to buy one.
-Later the Dreamcast shipped with Windows CE, so it's obvious Sega and MS had some kind of partnership.
-Now I recall hearing or reading some place year's back that Sega helped MS develop the XBox's memory architecture -- maybe on Tech-TV.
Now having rambled the above, I believe that Sega didn't leave because three was a crowd, or they were hurting so bad that they couldn't give it another go, I honestly think that MS paid them a sizable chunk to get out of the hardware business, because four consoles would have been way to crowded.
I also believe that it was MS's huge Marketing(FUD) machine that spread the Nintendo Kiddie crap -- which hurt sales. When the N64 came out, I had never heard anyone refer to Nintendo in that way and this was when I worked in the game industry. It's also a safe bet to say that the Cube would have been more successful, especially without MS's FUD machine at full steam(slander).
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