Nintendo was already gettin' the new videogame craze started with the Nintendo Entertainment System, and Sega wanted to re-skin its new 8 bit computer (called the Sega Mark III) as a hit gaming console.

It had all the makings to be one, with some superior hardware and a sleek black-and-red case with matching accessories, but Nintendo already had a huge market share and exclusivity contracts with the major third party studios at the time. That was already rough, but not long after the Master System was released, the PC Engine (TurboGrafx-16 in the States) hit the scene and blew 8 bit consoles away with its massive 16 bit improvements and hype. Instead of continuing that fight, Sega pretty much ditched their System and put full focus into their upcoming 16 bit console, the Mega Drive (Genesis).

Though the Master System wasn't hugely popular in North America and Europe, it absolutely destroyed any competition in a surprisingly passionate, brand new market: Brazil! Sega made sure the console and its games were sold at a much cheaper price than Nintendo there and secured a lot of deals that made Sega the household videogame name in the country for years and years to come.

One last note - You know Sega's handheld, the Game Gear? That was basically a portable Master System. The code of their respective games are practically interchangeable!