Based off of the Z80 processor, the Master System was a superior console in comparison to the NES, and Atari 7800. The unit allowed for more colors, better animation, and better audio in comparison to the two other 8 bit consoles of the time. However, this was not enough to ensure the console's success. With Nintendo's licensing practices of the 80's, SEGA could not convince many of the popular developers of the time to develop for the Master System.
Even though the console did not fare well in the USA, it had a successful run in Europe, and a strong run in Brazil that continues to last up to this day.
The Master System was able to spawn some very popular franchises that continued on through to the Genesis, and beyond. Games such as Phantasy Star and Alex Kidd have gone on to spawn numerous sequels, and lived on all the way to the SEGA Dreamcast.
The console offered two methods to deliver games. One is the standard cartridge, and the other was game cards dubbed SEGA Cards. The SEGA cards were much like the TurboGrafx-16 HuCards, and just like them were restrictive due to minimal memory space. However, they were far cheaper to produce. Cartridges won out due to the ability to allow for more storage space for bigger and better games.
The Master System had its choice of peripherals, also. Such as a light gun, Joystick, and 3-D glasses! Yes, the SEGA Master System was the first console with proper 3D gaming.
Unfortunately, the Master System did not sell well in the USA, but does have a great library for the retro collector. The system was discontinued in the USA in 1992.