The Saturn would've just got all those games like Final Fantasy VII (which they were negotiating for, Sony outbid them), Resident Evil 2/3/etc., Metal Gear Solid, Dragon Quest VII, Tomb Raider 2, etc.
The Saturn was a bit harder to program for but it's not like it was impossible, the PS2 was also a pain in the ass to code for and developers got over it.
Which means Sega probably would've won that gen and made a lot of money, more than enough to survive.
In which case, to be honest I think I'd prefer that scenario to the scenario of Sony being around. I like the Uncharted series, but to be honest, I wouldn't exactly miss any of Sony's other IP all that much.
Whereas the loss of golden-era Sega is a real shame ... so many great IP basically defunct now, and it drew Microsoft into the business which wasn't a net positive in my mind either.
I would prefer an industry with Sega vs. a Nintendo that's relevant to the mainstream console user (not just a handheld + maybe a soccer mom console company), versus basically the Sony/MS split we have today with Sega basically reduced to nothing and Nintendo pushed out into a niche console player for Nintendo fanatics only.
Warned - Leadified