I always thought that the Saturn would win in the beginning. It had killer launch titles, like Virtua Fighter 2, Daytona and Virtua Cop.
Unfortunately for Sega, those games alone could not float the system enough. While it did have some success, on a hardware and software levels it was doomed from the start. While similar in spec to the playstation, the saturn could handle 2D sprites brilliantly, but struggled at the 3D games. While it did produce great games in 3D, they were no-where near what the Playstation was capable of.
Soon developers left Sega and started backing the new kid on the block, Sony and it's Playstation.