There were many problems with SEGA. I grew up as a kid in the NES vs Master System generation. I began playing at 8bit, and enjoyed the console wars back then. I was always a Nintendo fanboy during the 8bit and 16bit generations. I lived through SEGAs mistakes, and i am not sure i agree with everything in the OP video. For example backwards compatibility was a nothingburger. Back then console technology grew by leaps and bounds with each generation, and honestly, no one would buy the Saturn to play Mega Drive (not Genesis, Mega Drive, american plebs, that's how the world called it besides you snobs) games. If someone wanted to play Mega Drive games, he could just keep his older Mega Drive. But the jump in quality was huge in the 32 bit era. No one cared about running 16bit games when you had 32 bit 3d graphics consoles and cdroms...
No, the main issue SEGA faced, was that they were an Arcade gaming company through and through. That means they treated their home consoles as platforms to bring their arcade games inside the home. They didn't particularly care about the differences between home gaming and arcade gaming. They did make some home-specific games, like Sonic the Hedgeog or Phantasy Star, but the vast majority of their catalogue were simply arcade ports and sports games. Nintendo on the other hand, while they did have some arcade games of their own (Donkey Kong for example), they quickly realised that the future was with home entertainment and even as early as the NES era they focused on creating home-focused games. NES and SNES did have their fair share of arcade ports, but most of their games were home-tailored. They were also more suited to little kids and families, and most people in the home bought consoles for those demographics, younger and older adults who wanted some arcade action could just go to the nearest arcade and play while also socializing instead (and to be honest, having experienced the glory days of arcades, i do miss them, there was a REAL social kind of gaming in those places, it was fun and i am sad that the newer generations never got to experience it, online multiplayer just isn't the same).
Now, one additional problem this arcade-focused approach had, was that arcades progressed in technology much faster than home consoles. Each arcade video game had each own machine, thus every year with new games, better machine platforms were used, while in home consoles, families didn't want to upgrade them yearly. Thus home consoles stagnated in terms of power until the next generation was released. So, with both Master System and Mega Drive, SEGA soon faced the issue that their arcade ports couldn't do the originals justice due to how lower specced their home consoles were. This lead them to the stupid hardware decisions the video mentioned, with MEGA CD and 32X upgrades. Both were attempts to improve their ports, but adoption was so low that they were barely utilized in the end. On the other hand, Nintendo went much smarter with the SNES: They tailored the SNES hardware to have less cpu processing power, but more graphical power and better sound co-processor chips, with additional capability of introducing game-specific co-processors inside game cartridges(so when an advanced SNES game needed additional power, the chip was added inside and didn't need a console upgrade). Mega Drive had a much stronger cpu, which made arcade porting easier, but had much lower visual and audio quality. This meant that games written for the SNES and making great use of the co-processors, could be much better in graphics and sound. Which is what actually happened historically. The SNES made the Mega Drive appear weak in multiplatform games, and the SNES exclusives were often a half-generation ahead of whatever the Mega Drive had. Plus the SNES nailed it with more story driven games and platformers, solidifying it as THE console to get for home entertainment (which is why, even though it launched 2 years later, by the end of the 16 bit era the SNES had sold more units).
With the Saturn, SEGA showcased to the world how completely out of touch they were with what the home audience wanted. They commited 2(+1) major fuckups with the Saturn. The first fuckup, was that they displayed to the gaming community that buying their hardware was a gamble, seeing how poorly supported the Mega CD and 32X were and how soon they discontinued them in favor of a new console. The second fuckup, was that seeing what Nintendo had done with the SNES, regarding its slower cpu + coprocessors design, they decided to do the same thing with the Saturn, and filled it to the brim with slow cpus and co-processing units that were a major pain in the ass to program for. Only their software strategy didn't change, they still wanted to just make it an arcade port machine.... Their own software houses never utilized the hardware properly to make quality home-focused exclusive games, and the multilpatforms couldn't be bothered since they wanted to have release date parity with the much simpler PS1. Thus they just released shittier versions on the Saturn that didn't utilize 100% of the hardware and called it a day. Bonus fuckup that they didn't expect polygonal graphics to be a big thing in the 32bit era and while technically the Saturn was much more powerful hardware-wise than a PS1, it was still slower to render 3D polygonal graphics, though with major programming sorcery (that only 1st party devs had an incentive to use) they could come close in a few games.
I disagree with the common myth that "the Dreamcast was a good console, that SEGA had finally learned from their mistakes but sadly the Dreamcast failed". No, the Dreamcast was in fact just as shitty as their previous consoles if not shittier due to being completely out of touch with the market at that point (the rise of PC gaming and PS2 era and the downfall of arcades). They repeated the major fuckup of discontinuing a console after just 2-3 years, and they repeated the major fuckup of making their console just an arcade port machine, filling it with fighting games, racing games, and arcade ports, and few exclusives and story driven games. Yes the dreamcast was powerful for its time, yes it was simple to develop for, but the thing was that with PC gaming and PS1/2 people realised they cared more about deeper more time consuming experiences for their home entertainment. They didn't want to pay 60-70 euros per game just so they can play a few fights in Virtua Fighter and be bored, or play some Crazy Taxi and see everything the game has to provide after a couple of hours. They wanted to play Final Fantasy, Resident Evil, Zelda Ocarina of Time, Baldur's Gate, etc etc, games that couldn't/wouldn't be made for arcades but were perfect for home users who could immerse themselves in the story and get their money's worth. Dreamcast didn't provide that, again, despite a few overrated efforts like Skies of Arcadia.
In the end, the problem with SEGA was their fixation with Arcade gaming. They never managed to figure it out, clearly shown by the fact that they kept repeating the same mistake with multiple console releases. I was a Nintendo fanboy as a kid, but after i became a PC gamer-only, i did play a lot of SEGA games on emulators. I clearly saw the appeal, SEGA games did have their own charm, don't get me wrong. But the thing is, looking back, i wouldn't want to pay full cartridge price in order to play those roms. If i went back in the early 90s, i would still want to play Zelda, Mario, Final Fantasy, Chrono Trigger and Metroid, instead of Sonic and arcade ports. I can also clearly see that SNES games looked and sounded better. In the end, if i had to buy a home console, it would only be a NES/SNES. But since the SEGA games are mostly arcade-like, i still find them better to play in short bursts in emulators these days, since i don't have to be immersed in them, just some casual fun, exactly like they were in the arcades. Emulators are free anyway and piracy is not wrong.
PS: The main difference between Arcade and Home gaming is that Arcade games tend to be designed for short playtimes and ideally hard to play in order to force you to enter more coins, or leave the machine to the next guy. Home games don't have this issue, so they could drop the excess "hardcore" difficulty and focus more on immersing the player and providing more playtime for the dollar. And an additional downside to arcade gaming, is that it typically produces less emotional attachment to the players. Story driven games can have a more lasting impact, and thus create more brand loyalty.
