Sega's glut of hardware wasn't their problem, it was their lack of a compelling "killer app" to push hardware sales. The SNES continued to sell well into the 32-bit era thanks mostly to Donkey Kong Country and its sequels.

Virtua Fighter 2 was a huge hit in Japan that made the Saturn the most successful Japanese Sega console, but the VF series was flat in the US. Had Sega had a game that pushed systems like Sonic the Hedgehog pushed the Genesis, that game would've made its console (32X or Saturn) a hit.

In fact, the early 32 bit market was wide open in 95 and 96. Sony had the lead, but they could've been overtaken by Sega or Nintendo had either one of them hit a home run software title.