In Japan, it was distributed under the name Sega Super 32X. In North America, its name was the Sega Genesis 32X. In Europe, Australia, and other countries that use PAL, it was called the Sega Mega Drive 32X.
The 32X came with a spacer so it would fit properly with the Mega Drive II. It could be used with the Sega Multi-Mega/Sega CDX system, but the spacer would not accommodate the CDX, which created a number of user-unfriendly conditions in the unit. Without the use of the spacer on a Mega Drive II, some of the 32X hardware was left exposed and vulnerable. The combined unit was also very prone to tipping over, risking damage to the unit and games. In addition to the physical problems, there was also an issue with FCC approval.
Most 32X games cannot be played unless the distribution region of the game matches the region of the console. A few games are not locked and can be played on a console from any region (e.g. FIFA 96). Two games, Darxide and FIFA Soccer '96, were only released for the PAL 32X.
All but one of the games released for the Japanese market were released in the United States, albeit some had different names. The one Japanese-only game was Sangokushi IV (known as Romance of the Three Kingdoms IV).
In addition to regular cartridge-based 32X games, there were also a very small number of CD-ROM games for the 32X. These games were labeled with Sega Mega-CD 32X (Sega CD 32X in North America). As the name suggests, these required both the 32X and Mega-CD/Sega CD addons. The lack of a significant userbase due to the high cost of purchasing all three necessary components saw only five games released, only one of those developed by Sega. The most notable of these was a new version of the infamous Night Trap with 32,768 onscreen colors instead of the 64 found on the regular Mega-CD/Sega CD version.
A common misconception of the 32x is that the audio is based on Q-sound technology. This is incorrect. The 32x employs two PWM sound channels and are mixed through the audio lines of the main system's cartridge port. The size of the PWM width latch can be select by one of the audio registers. Any sort of wavetable synthesis requires one of the two SH-2 processors to do this in software. This includes frequency scaling and mixing of software channels back into the two channel output, though most 32x games used the PWM unit to playback fixed frequency samples such as drum kits, voices, and sound effects, and having the main part of the music run from the YM2612 and PSG channels. The PWM unit in the 32x is also similar to the two PWM DACs used in the GBA.
The 32X hit the market in North America in November 1994, during the same month the Sega Saturn was released in Japan. Many industry insiders speculated that the 32X was doomed from the beginning as the Sega Saturn hardware was widely regarded as more powerful than the 32X and had the support of many Japanese third party software developers (a necessary resource required for any gaming platform's long term success) which the 32X was sorely lacking.
Only 500,000 consoles had been produced for North American consumption, yet orders were in the millions. The console allegedly had numerous mechanical problems. Games had been rushed for the system in the run up to Christmas 1994. Some early games came with errors in programming, causing crashes and glitches on certain titles. Other games required leaving out parts in order to make the Christmas deadline; for example, the 32X version of Doom is missing seven levels present on the PC and even the Super Nintendo version; plus, Doom for the 32X was criticised for having worse sound than the Super Nintendo version. some consumers complained that their 32X was not working with their Mega Drive/Genesis or television and Sega was forced to give away adapters.
Since this was an expensive add-on system, Sega decided to offer a £50 discount on games with the console in Europe. However, the offer came in the form of rebate vouchers, which were difficult to take advantage of. Just like its North American counterpart, this console was initially popular. Orders exceeded one million, but not enough were produced, and supply shortage problems arose.
Customers perceived the Sega Saturn, Nintendo 64, and the Sony PlayStation as the true next-generation consoles, due to their rich launch titles and 3D graphics. Also, customers perceived that Sega abandoned the 32X despite promises to the contrary, due to the launch of the Saturn.
Store shelves became littered with unwanted Sega 32X systems, and prices for a new one dropped as low as $19.95 (some have claimed that video game exchange stores became so filled with 32X systems, the stores refused to accept the console--even at no cost). Sega planned a console named the Sega Neptune, which would have been a Mega Drive/Genesis and 32X in one. However, by the time a prototype was developed, the Sega Saturn was going to be released, and Sega canceled the Neptune.
The last game released for the 32X in North America was Spider-Man: Web of Fire (1996). The last ever 32X game was Darxide, released only in Europe, which had been intended by Frontier Developments to be a launch title for the ill-fated Neptune. Both these games now command a high value from collectors — but especially Darxide (up to $1000) due to its scarcity, reputation and auspicious creator (David Braben, co-writer of the groundbreaking game Elite). Nevertheless, it is exceeded in rarity by the European PAL versions of the games Primal Rage and T-Mek. For obscure reasons a mere handful of copies of these games are known to be in circulation - with T-Mek being so scarce that until a copy surfaced on eBay in late 2005, it was widely held that the PAL release was only a rumor. The appearance of a copy has fueled speculation that other rumored but unconfirmed PAL games may also exist, in particular BC Racers.
For many years prior to the 32X, console makers promised devices like the 32X (for consoles such as the ColecoVision, Intellivision II, and some Atari systems) that would extend and enhance the original system. Sega's 32X effort lacked the software titles and 3D capabilities the gaming community demanded; the add-on technology represented a dead end, ultimately punishing early adopters. Ignorant of the idea that console systems' primary strength is in standardization, Sega had created three different platforms (the Sega Mega Drive, and the Mega-CD/Sega CD and the 32X add-ons) all under the same banner, stealing valuable shelf space from itself and confusing both vendors and consumers in the process. The entire episode demonstrated that producing such add-ons is likely to have detrimental effects on a system's brand marketing strategy.
The final nail in the coffin for the peripheral came in October 1995, when Sega's CEO, Hayao Nakayama, ordered that the 32X and other Sega consoles be cancelled in order to focus its limited resources on the Saturn system.
Sega had admitted how expensive and problematic the 32X was, so it was decided to make a combined version of the Mega Drive/Genesis and 32X; however, by the time a prototype came out, the Sega Saturn was ready for release. Sega felt that consumers would not be interested in the Sega Neptune, so the project was scrapped. There are several prototypes, and at least one was declared to work.
Electronic Gaming Monthly used the Sega Neptune as an April Fool's Joke in its April 2001 issue. The issue included a small article in which the writers announced that Sega had found a warehouse full of old Sega Neptunes, and were selling them on a website.