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Leynos said:

SEGA should still be making consoles instead of them TBH. They filled in where SEGA left and feel they never lived up to the greatness of SEGA. I think they tried to buy SEGA as well. Actually tbh. SEGA tried to court Sony into making the hardware for Saturn. It didn't work out but since MS made the OS for Dreamcast being based on Windows CE. Should have just let MS make the hardware in a licensing deal with the SEGA branding on the box with SEGA's first-party games. That would have been the best outcome. SEGANet might have taken off like XBL. EA might have been on board. Zone of the Enders would be on it instead of PS2 (ZOE was originally in development for DC) ..man but looking at the world and the gaming industry the shit shape it's in. We live in the darkest timeline.

I think that you have that the wrong way around. 

Hideki Sato talks about creating SEGA Saturn hardware and Sony asking SEGA to go third party

They had their own semiconductor factories. Once when I was talking with Ken Kutaragi [the creator of the PlayStation], he said “Hideki-chan”—he refers to me using the “chan” diminutive—“Hideki-chan, there’s no way you can beat me. Where are you buying your processors? From Hitachi. From Yamaha. What about your CD-ROM drives? You’re buying everything. By buying from Hitachi, Hitachi is profiting. You can’t make anything yourselves. We can make everything ourselves, including custom parts. We have our own factories.” Near Nakashinden, they had a huge factory where they made audio equipment that they were using for the PlayStation. Their cost structure was completely different.

“That’s the way it is, Hideki-chan,” Kutaragi told me. “So quit the hardware business. Why not just do software? We’ll give you favorable treatment.” He wanted us to go third party. We had been going for so long in the hardware business, for better or worse, and to go third party now? We had been half-heartedly successful in America once, and this made it impossible to quit the hardware business. Maybe if the Mega Drive, the Genesis, had been a failure, things would have been different. But we had a strange taste of success.

http://segabits.com/blog/2018/06/29/hideki-sato-talks-about-creating-sega-saturn-hardware-and-sony-asking-sega-to-go-third-party/

Prior to that, Sony had been the one courting Sega on teaming up to create a console before the PlayStation was developed, after Nintendo had blown off Sony.

Sega and Sony Almost Teamed Up on a Console

"Sony came to us after they had been rebuffed by Nintendo," Kalinske recalled. “They had wanted Nintendo to use some technology that they had, and Nintendo instead chose to work with Philips. That really annoyed Sony. Olaf Olafsson [Sony Electronic Publishing President] and Micky Schulhof [President of Sony America] came to my office and said, 'Tom, we really don’t like Nintendo. You don’t like Nintendo. We have this little studio down in Santa Monica [Imagesoft] working on video games, we don’t know what to do with it, we’d like Sega’s help in training our guys. And we think the optical disc will be the best format.'"

"Sega of America and Sony were both convinced that the next platform had to use optical discs. We had been working on this CD-ROM attachment to the Genesis, which we knew really wasn’t adequate, but it taught us how to make games on this format," said Kalinske. "We had the Sony guys and our engineers in the United States come up with specs for what this next optical-based hardware system would be. And with these specs, Olafsson, Schulhof and I went to Japan, and we met with Sony’s Ken Kutaragi. He said it was a great idea, and as we all lose money on hardware, let's jointly market a single system – the Sega/Sony hardware system – and whatever loss we make, we split that loss."

Kalinske took his proposal to Sega's Board of Directors, who promptly vetoed the idea.

"Next, we went to [Sega president] Nakayama and the Board at Sega, and they basically turned me down. They said, 'that’s a stupid idea, Sony doesn’t know how to make hardware. They don’t know how to make software either. Why would we want to do this?' That is what caused the division between Sega and Sony and caused Sony to become our competitor and launch its own hardware platform."

https://www.usgamer.net/articles/sega-and-sony-almost-teamed-up-on-a-console