To look at it now, you might wonder what Sega was thinking. It's first attempt at a portable video game was the Game Gear, and it was saddled with a number of problems. The system is huge, has a weak and smeary screen, and chews through batteries like mad. At the time of its release, it was a daring leap into the future. Nintendo's portable Game Boy juggernaut was still ambling along in pea-green monochrome. Game Gear goosed every possible aspect of portable gaming, so it was going to be a sure winner, right?
Let's start with the color screen. The leap to color displays in portable gaming was inevitable, but Sega jumped in too soon. The screen was expensive and blurry; fighting games and platformers smooshed by, while onscreen text was nearly impossible to read. Okay, how about the game library? Initial developers put real effort into the games, but there were few must-have titles.
Add-ons included an adapter to play full size Sega Master System (their prior consoles) carts with the portable. Innovative and it greatly expanded the game library, but didn't really make much of a mark. How about a tuner (prized as a rarity today) to turn the Game Gear into a portable color TV? Nope, not a nibble.
My favorite third party add-on is this completely insane case. It's a hard shell case that holds the Game Gear, and is gasketed all the way around. Buttons are sealed, and every switch is covered with a rubber hatch. Were they dropping Game Gears to soldiers in the desert? This overengineered housing makes me wonder how you could have time to play video games in the hostile environment this case was clearly designed for.
All of that aside, Game Boy ultimately won out because of their vast library of winner games, and more importantly - battery power. It took Nintendo years to create a color unit because they were waiting for LCD technology to be more battery friendly (it took them several more years to commit to units with a backlight). It turned out to be a good decision - the earliest Game Boy could run 10-12 hours on a pair of four batteries, while the Game Gear chewed through six AA's in about two hours.
So even if Game Gear had succeeded in bringing more fun games to market, or creating hardware expansion anyone cared about, it would have stopped being fun in the few hours it took to croak $100 worth of batteries.