Former Sega of America boss Tom Kalinske was in charge of the company during its glory years, and it was under his leadership that it was able to challenge the might of Nintendo during the early '90s. Full of interesting stories and anecdotes, Kalinske's story has been told in Blake J. Harris' excellent book Console Wars - soon to turned into both a documentary and a feature film - and he recently has been kind enough to share some more memories via Reddit.
As well as revealing that Sega was in talks with Trip Hawkins about releasing the 3DO console, Kalinske says that Sega dodged another budget by not entering into an agreement with Massachusetts-based Reflection Technologies - the same company which would shortly afterwards supply the tech that powered Nintendo's disastrous Virtual Boy.
Sega was, at the time, seriously considering entering the Virtual Reality sector and even got as far as producing a headset for the Mega Drive / Genesis which was shown off at trade shows of the period, but sadly never saw a commercial release:
It was pretty cool. You could put it on and literally you were in a virtual world, and it moved as you moved your head.
One of the problems was almost everybody got sick. t caused severe motion sickness. Other people got severe headaches.
The potential deal with Reflection Technologies was related to creating a virtual reality device that worked by reflecting light off of a mirror - Nintendo would later license the same tech for the Virtual Boy.
Kalinske's summary of the failed deal gets straight to the point:
I think we were right in turning it down.
You can check out a summary of the podcast here - if you're a keen follower of video game history, it's well worth a look and a listen.