Let's just ignore the fact that Sega was losing hundreds of millions of dollars each year.
They only started losing money during fiscal year 1997, mainly due to Dreamcast R&D and the downturn in the arcade market. Every year prior they made profit, even during the Saturn's early years.
The 32X sealed Sega's fate.
This is wrong. 32X didn't really affect Genesis sales, as MegaDrive still maintained sales lead in Europe over SNES, and in Japan the 32X wasn't even seriously pushed out. The draw-down of Genesis sales in 1995 was due to SEGA of Japan's decision to nix Genesis support in favor of the Saturn.
And had released 4 pieces of hardware in a row that had failed before Dreamcast
Which are? The MegaDrive was very successful. The 32X and SEGA CD are add-ons, they should be treated more as peripheral devices as you don't need them to play Genesis/MegaDrive games. The SEGA CD was the most successful add-on peripheral in the gaming market until the Wii Fit board and Kinect releases.
If you're going to count those as consoles and failures, you should also count the PS4 Pro as its own console and failure, since it doesn't make up even a notable fraction of total PS4 systems sold. Can also count the PSVR as a failure too; same story. That's what happens when you count peripherals and revision models as their own separate game platforms :/
And had only managed to sell 9 million Dreamcasts in a 3 year time period.
The curve of console sales back then was much lower/slower than it is today. The PS1, for example, I don't think it even sold 10 million WW by its second year on the market, and that's the PS1! Same can be said for the MegaDrive, SNES, etc. All relatively successful systems but the curve for their big sales was more gradual on the rise versus what we see with consoles today.
You actually have to take that context into mind before trying to frame 9 million in 3 years as a failure. It did fall short of SEGA's required amounts but that was due to a myriad of circumstances they created for themselves in the years prior.
Sega faild for many reasons and most of them were by their own fault. About the FUD tactics, actually SEGA pioneered it in the home console market using it against Nintendo very successfully, and they were doing it against the first PlayStation too.
SEGA didn't actually do FUD against Nintendo; Genesis typically did get the more mature games, or less censored versions of games, back in the day. "Blast Processing" was used as a marketing gimmick, but the technique itself is actually possible on the hardware. It was just SO difficult for devs under tight schedules to leverage it most games (due to needing to get the timings correct for the DMA), that outside of a few games like Sonic it wasn't leveraged too often.
Also keep in mind Nintendo ran an editorial in Nintendo Power that had its own fair share of smear against the Genesis.
Excuse me, we are not the ones who dragged Dreamcast's corpse out of its grave to use it as ammo here. The link was clearly a hitpiece meant to attack Sony, and you had the GALL to claim that Sony started it? Have you no SHAME?
I haven't fully read the article and the thread title in no way matches the title of the actual article, but I think some of you have a mistaken impression of Sony's past in the market. I wouldn't necessarily say they pushed "FUD", but they did leverage their financial power at the time to put an "unfair squeeze" on Nintendo and particularly SEGA, the sort of financial leveraging people are trying to call MS as being "monopolistic" for doing now when they purchased Bethesda.
The truth is, Sony did a lot of ruthless business things even back in the early '90s. It's said they intentionally wrote the contracts for the Play Station add-on in such terms they'd screw Nintendo out of all royalties of software sold on the peripheral, hence why that partnership was dropped. It's said that Sony leveraged their partnership with SEGA at the time (through Sony Imagesoft) to illegally acquire a Saturn devkit from Japan and use it as a means of constructing PS1's specs around. Those are rumors, but a decent bit of people have relayed these throughout time.
Then getting to the PS1 itself; it's kind of an open secret that Sony often paid off 3P publishers through backroom deals to nip certain big games off of SEGA's Saturn. The original Tomb Raider for example, was originally going to be a Saturn exclusive, this is from Core Design themselves. However, Sony threw in some cash towards Eidos (the publisher at that time) to get a PS1 version going. This affected development of the Saturn version, causing it to fall behind as resources were pushed towards the PS1 version instead. While SEGA arranged for timed exclusivity of the game, this was just the European version, and it was a late deal at that (you can argue if that is "scummy" or not).
Effectively, though, Tomb Raider was a multi-platform series but for the sequels, Sony arranged a full exclusivity deal, causing the planned Saturn port of Tomb Raider II to be cancelled, and turning a multi-platform IP into a PlayStation/PC exclusive IP (a Nintendo 64 version of Tomb Raider was also planned but cancelled due to this same deal). Another example is with Resident Evil 3/Resident Evil Code:Veronica. In fact, Shinji Mikami did an interview about this recently. He said that they originally planned for Code:Veronica to be RE3, but Sony (he didn't mention Sony directly, only implied it was them) forced them to keep to a contract asking for 2 main sequels to the original game for PS1, therefore they forced them to make Nemesis (the planned side-story) a numbered entry, and Code:Veronica relinquish the "3" in its title.
There's other implicated instances where Sony may've leveraged their financial power to affect review scores or claims of system capabilities through proxy of other companies like EA; for example someone high up at EA at the time of the PS1/Saturn launches stated that the system could only do 60,000 polygons per second, and used the buggy port of Daytona USA as their proof. Other sources ran with this and it contributed to the perception of the Saturn being weaker at 3D than it actually was. You do have to ask yourself why someone from a company like EA, who got their big push in the console market through SEGA (albeit scummily), would make a statement like that if they were still a software partner for SEGA's Saturn. It's not too far-fetched to think that there could've been some influence from behind-the-scenes to generate such a claim.
So no, I wouldn't call these things "FUD" as they don't involve Sony corporate figures directly, making any direct false claims about SEGA...but by that notion if we take what some people try claiming MS does as "FUD" against Sony in the lead-up to this console gen launch, then we could easily see how some of the things (particularly the last point) I listed could be interpreted as FUD or at least the kind of "anti-competitive practice" behavior via leveraging their financial position, that people want to claim is what MS are doing buying up companies such as Zenimax.
Like I said; NONE of these console manufacturers are clean of hard-balling business flexing, or have 100% clean records when it comes to possible "FUD" against rivals, even if that wouldn't come from the companies directly. Thinking otherwise, or trying to go "well my brand's company is less guilty than yours!" is both childish and dangerous as it tries excusing something which should be viewed as objectively wrong, into a scale of relativism allowing for ever-shifting of goalposts and Overton windows.
He also claimed for SEGA "that our marketing came together and really lifted the entire industry from being predominantly a toy category" which is simply a lie. Sony broke this notion with the original PlayStation and with PS2 they consolidated everything.
No, your interpretation is what's a lie here. Sony took their marketing cues for PS1 directly from SoA's Genesis adverts. They literally hired guys like Steve Race, who worked at SEGA prior to the PS1's launch, to lead the company with said launch.
Sony capitalized on a growing mature gaming market SEGA was already appealing to with the Genesis/MegaDrive, SEGA CD, and 32X. You need only look at adverts from the era to plainly see this. It was a smart decision on Sony's part, but they didn't revolutionize anything in that aim of the marketing for game consoles. They did iterate and refine it, however, which deserves props.