SNES wasn't really on its deathbed, it was basking in the afterglow of its post-93 resurgance at that point, sadly 1995 in a lot of ways would be the last year that Nintendo would ever be the market leader of the traditional console market. SNES had a very strong 94/95.
The Genesis gave a good fight through 1991, Nintendo started turning the tide heavily in 1992 though and were well on their way to decisive victory until they made a brutal miscalculation in censoring Mortal Kombat, that allowed Sega to win the '93 holiday season.
Seeing low sales at this point in America, Mr. Yamauchi in anger lashed out at his own son-in-law, Minorau Arakawa NOA's president, to the press (a taboo in Japanese culture, but a massive dressing down) for letting Sega paint the SNES as a "child's toy".
In 1994 Nintendo would reinvent itself under the "Play It Loud" MTV style marketing (shamelessly ripping off Sega, sure, but it worked). Donkey Kong Country would deliver Sega and their hedgehog mascot a devastating blow and not only was Mortal Kombat 2 coming to the SNES with blood, but a in a dramatic turn around, Nintendo was making their own hyper-violent fighter, Killer Instinct, done by the DKC guys.
So 1995 was kind of like a cornonation year for Nintendo, especially as DKC crushed the 32X. Sega was beaten. Virtual Boy was kind of like this bizarre oddity, but to their credit Nintendo was smart enough to kill it quickly so it didn't have much of a lingering effect. I do wish I had picked up one or two Virtual Boys from Blockbuster Video when they were on clearance though by '96 or so ... could've had them for like $40 or $50 a pop.
It's really a shame looking back at this period, with the SNES finishing so strong and Sega fizzling out, Nintendo really easily could've have become the defacto market leader ... all they had to do was agree to use CD-ROM in the N64 even as an add-on and they would've kept their third party partners happy. Sony was really weak in those days, they would not have been able to go toe-to-toe with Nintendo back then, PSX sales were really slow early on (better than the Saturn, but that wasn't saying much).
