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Just to clarify my viewpoint: I consider the Genesis a gen 4 system.  But Sega tried to make it compete directly with the NES.  It failed.  The Genesis sold poorly for the first couple of years, and didn't dent NES sales one bit.  However, the Genesis gave the SNES a serious run for its money.  Sega didn't get to choose which console it competed with.  The market decided.  All of this of course is referring specifically to the North American market.  (Back in those days, the markets for Japan and NA were out of sync and the Genesis/Mega Drive wasn't terribly successful in Japan anyway.)

So Genesis is gen 4, but it tried to be gen 3 (and failed).