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Sega itself. PS competition was a factor, but Sega still was a strong second way in console gaming after the dominant Ninty way for what concerns SW, it was a bad HW strategy at the time of Saturn launch that started or accelerated its decline. Obviously Sony was very intelligent to exploit Sega internal problems and Ninty bossy relationship with 3rd parties to carve its place in the market, but both Sega and Ninty paved its way.

Stwike him, Centuwion. Stwike him vewy wuffly! (Pontius Pilate, "Life of Brian")
A fart without stink is like a sky without stars.
TGS, Third Grade Shooter: brand new genre invented by Kevin Butler exclusively for Natal WiiToo Kinect. PEW! PEW-PEW-PEW!