The Mega CD was first shown in Japan at the Tokyo Toy Show in 1991 and later released on December 1st for ¥49800. In the first year of release in Japan, Sega sold 100 000 systems, but would have sold more if the price wasn't so high. Sega of Japan did not inform Sega of America about their Mega CD until a few months later. It was first shown in the US at CES in Chicago, Illinois in March 1992 and announced for release in November. It was released earlier than this, on 15th October in America (for US$299) but not until Spring 1993 in Europe where it was very expensively priced and so only 4% of European Mega Drive users owned a Mega CD in the end. UK had the biggest following of the Mega CD in Europe when it debuted in April 1993 for £270. 60 000 of the 70 000 Mega CDs shipped to Europe were sold by August 1993. The Australian release for the Mega CD was 19th April 1993.
The Mega CD (or Sega CD in America) came about just after when the Super NES was released and Sega was beginning to lose some sales on the Mega Drive/Genesis, so they released the Mega CD as an add-on to pick up sales and make sure they remained at the top of the market (By 1992 Sega had a 55% share in the US video game market). It was not the first CD-based video game system on the market, though. NEC had already released their PC Engine CD/Turbo CD/Turbo Duo, but was not very successful. The Mega CD/Sega CD was superior to NEC's system as well. Originally a CD tray unit that sat under the console, it was redesigned in 1993 as a top-loading unit that was smaller, cheaper (US$230), more reliable and would fit next to the Mega Drive II/Genesis II. Some European countries did not receive the Mega CD until this second version came out, thus the slow sales in the continent.
With the massive amount of storage space on CDs, game producers saw the capability of using Full Motion Video (FMV) in their games. Unfortunately, when shown on a 16-bit console, the graphics turned out very pixellated and grainy, but that didn't stop them continuing to make such games. Other games were re-releases of Mega Drive titles but with more levels or added FMV sequences/music. The Mega CD/Sega CD was selling fairly well, but not as well as it could. This was because of the games. At Summer CES in 1992, Sega announced that Sonic CD was coming to the system, and when it did, sales soared, just like what had happened with the Mega Drive/Genesis when the same character made his debut.
There were a number of consoles released that combined the Mega Drive and Mega CD. Although there was a lot of hype about the Mega CD, not everyone got to own one because of the high price. Due to lack of support, not many games were made for Mega CD. But these were not the only factors that made the Mega CD fail later in its life. In 1993, the issue of violence in video games (especially Night Trap) arose and caused a lot of media attention. Nintendo, who was losing many sales due to Sega and was no longer number one, openly attacked Sega, saying they were responsible for all these violent games. Many stores would no longer stock these games in fear of public protest, and sales decreased. Because of this, Sega developed the VRC (Videogame Ratings Council), and were the first to put classifications on video games. Nintendo later went on to hypocritically release Mortal Kombat for the Super NES.
The number of FMV games for the Mega CD also didn't help. Although the games looked amazing at the time because of the real video, there was not much player involvement and so people got bored of them. The Mega CD slowly went downhill from 1993 until it died in 1996.
Information on this page has been sourced from Console Database.