In Japan, the console was distributed under the name Sega Super 32X. In North America, its name was the Sega Genesis 32X. In Europe, Australia, and other countries that use PAL, Sega Mega 32X was its name.
With the release of the Super Famicom in Japan and the Super NES in North America, Sega needed to leapfrog Nintendo in the technological department. The Sega Mega-CD aka Sega CD hadn't worked as well as they wanted it to. Sega had various developments underway, named after planets. Some used System 16 technology like the Sega Megadrive and Sega Genesis did, as well as other arcade games.
On January 8, 1994, Hayao Nakayama, then CEO of Sega, ordered his company to make a 32-bit cartridge based console that would be in stores by Christmas 1994. This would at first be named "Project Jupiter", but after Sega found CD technology cheaper, they decided to modify it instead of dropping the cartridge project. Hideki Sato and some other Sega of Japan engineers came over to collabarate about the project with Sega of America's Joe Miller. The first idea was a new Sega Megadrive with more colors and a 32-bit processor. Miller thought that an add-on to the Megadrive would be a better idea, because he felt that gamers would not buy an improved version of the Megadrive. And so, this project was codenamed Project Mars, and Sega of America was going to shape the project.
The video-gamer public first got a glimpse at the Summer 1994 CES in Chicago, Illinois. Players were salivating over the system, because that system plus the Genesis would be superior to the Super Famicom/SNES. The console was unmasked as the 32X, with a price projection of $170, at a gamers' day, held by Sega of America on September 1994.
The system cannot work by itself. The Sega 32X can only be used in conjunction with a Sega Megadrive; it is plugged in where the cartridge bay is. Besides playing its own cartridges, it also acted as a passthrough for Megadrive games so it would be a permanent attachment. The 32X came with 10 coupons and several spacers, so it would work with all versions of the Megadrive.
The system cannot work by itself. The Sega 32X can only be used in conjunction with a Sega Genesis system; it is plugged in where the cartridge bay is. Besides playing its own cartridges, it also acted as a passthrough for Genesis games so it would be a permanent attachment. The 32X came with 10 coupons and several spacers, so it would work with all versions of the Genesis.
The versions of the 32X all have lockout chips, so 32X games cannot be played on a different region than what region the console came from.
Almost all of the games released for the Japanese market had already been released in the United States, albiet some had different names. This console had no chance in Japan, due to the fact that the Sega Megadrive was not that popular in that country.
Only 500,000 consoles had been produced for North American consumption, yet orders were in the millions. Games had been rushed for the system, and they came with errors in programming. Many were complaining that their 32X was not working with their Megadrive/Genesis or television. Sega was forced to give away adapters. What kept the console alive 1994 to 1995 was Star Wars Arcade. Otherwise, the console would have gotten even less attention. The console allegedly had numerous mechanical problems.
Since this was an expensive add-on system, Sega decided to bundle in some video game systems with the console in Europe. However, the offer came in the form of money off vouchers that had to be sent as a rebate. It was difficult to take advantage of this offer. Just like its North American counterpart, this console was initially popular. Orders exceeded 1 Million, but not enough were produced, and shortage supply problems came.
Two games, Darxide, and FIFA Soccer '96, were only released for the PAL 32X. The Darxide videogame had been awarded "Best 32X Game".
By, mid-1995 the time the Sega executives realized their blunder, it was too late. Developers and licensees had abandoned this console in favor of what they percieved to be a true 32-bit console, the Sega Saturn. Even though the 32X was a 32-bit system, the games weren't taking the full advantages of 32 bits, being that they were 2D and many were rushed. Also, customers percieved the Sega Saturn and the Sony Playstation as the true next-generation consoles, and they abandoned the 32X despite Sega's promise to support it. They had felt cheated because of the games that they felt as bad, and so they waited for the Playstation and Saturn. Store shelves became littered with unwanted Sega 32X systems, and prices for a new one dropped as low as $19.95. Sega planned a console named the Sega Neptune, which would have been a Genesis and 32X in one. However, by the time a prototype was developed, the Sega Saturn was going to be released, and Sega cancelled the Neptune.
The situation became so bad that the 32X was actually mocked on Saturday Night Live. The Sega 32X fiasco is now considered one of the most badly planned console releases ever.
The public in North America and Europe quickly grew disgusted with this console, and when they got word of the Sega Neptune, the public ran off. The Neptune never made it past the drawing board.
The system ended production in 1996 worldwide. The last game made for the 32X was Spider-Man: Web of Fire (1996). All it ever had been was a gap filler between the Genesis and the Saturn. The 32X ruined Sega's reputation, which would ultimately kill its console business.