I think a lot of it was Japanese ego and arrogance. They seemed to sort of resent how successful the Genesis was in the US and did a lot to really tighten the reigns and also rejected attempts to team up with both SGI (which Nintendo ended up doing) and Sony as well. Teaming up Sony just to remove them as competition even if you ended up getting a smaller cut of those games probably would have been the better move. Then there are other things that limited software coming out for the Saturn like not getting good dev kits out to third parties until the Saturn was all but dead. And yeah, the lack of focus on their hardware direction. But mostly I think it was Sega of Japan trying to flex and make sure everyone knows they don't answer to anyone and people answer to them is what did it.