The Mega Drive (in Japan) was based off of the Sega System 16 arcade hardware. It uses the 16 bit Motorola 68000 processor as the main CPU, and the Zilog Z80 processor as the main audio processor. The system was a popular machine that allowed for backwards compatibility with the Master System library thanks to an expansion peripheral. The Power Base Converter allowed for both cartridge and SEGA Card games to be used on the Genesis.
Many popular arcade titles were finding their ways to the new console. Unlike the NES ports of various arcade games, the Genesis was able to produce a level of quality that was almost spot on. However, in order for SEGA to find itself at a level of competitiveness with Nintendo, SEGA opted to go for games that were not seen as "the norm". Also, due to Nintendo's licensing practices were altered due to lawsuits, SEGA was able to start convincing numerous major third party developers to produce their games for the more advanced console.
The Genesis was able to maintain a level of competition that was hard to beat through the late 80's and early 90's, even with the TurboGrafx-16 in the mix.
SEGA's attempts to keep the unit in the consumer's mind brought on peripherals and redesigns. First, there was the SEGA CD. The expansion allowed gamers to play more in depth games on their consoles, also allowing for better graphics thanks to the 700 Megabytes of CD space. Both the Genesis and SEGA CD then went through a design change to reduce the size of the console. The age of 32 bit was quickly sneaking up, and the fact that the Genesis had issues with producing 3D games, like the SNES, forced SEGA to release a "go between" add-on that would give the Genesis true 3D polygonal power, better audio, and more. The 32X was a flop that saw very few games released for it. However, there are a number of quality games released for the expansion device making it worthwhile for collectors...if you can get around the horde of cables from having all of these add-ons.
A rumored "Neptune" console was making rounds in the 90's. A Genesis and 32x all-in-one unit. It never made it beyond prototype stage, as the Saturn was soon to be released.
The SEGA Genesis has remained a popular console far beyond its years. Officially discontinued worldwide in 1997. Majesco took up releasing a third design of the unit, but discontinued that in 1999. AtGames has been releasing a new variation of the Genesis with 80 games pre-programmed into the unit, even though about 30 of them are poorly designed "homebrew" games. It does offer cartridge support, but with some known issues with certain games reported.