Not sure how young people are in here, but it's important to remember that game media was totally different back in the '90s. Very rarely did a mag actually come out and say, "LOL! This company is doomed, etc!"
Jaguar and 3DO were considered incredibly niche and uncommon in the wild. Neo Geo AES as well. Doom and Wolfenstein were not the juggernauts (on consoles) as they are today. (If I knew, I would have grabbed Jaguars with link cables on clearance back then). Alien vs Predator and Super Street Fighter 2 were the highlights of those systems back then (as least, as noted by the media)
The Segas were a bit different. I was a Nintendo kid all my life. My first memories of Mario and Zelda came from the cartoons , not the games. If not for the Zelda cartoon every Friday, I never would have picked up that golden cartridge that began a lifelong hobby.
But as much as I loved the Nintendo franchises, playing Sonic for the first time in 1993 was a totally different beast. After all, this was the year Sega succeeded in the holiday wars versus Nintendo. Plus, it didn't hurt that Genesis stuff was WAY cheaper than SNES. But like the NES, the Genesis had a hell of a back library (as I dub it, Before Sonic) that caught my eye that a lot of my Sega friends ignored, like Joe Montana, Ghostbusters, Ghouls N Ghosts, even Moonwalker.
So, a Sega CD was only natural, considering that was the only way to play the newest Sonic. And third party games with better music and features than the SNES versions for way less the price? Why not? And a ton of the games were clearanced at Toys r us for $10, so I loaded up. (Though I missed Shining Force CD at every fucking chance!)
But no one ever said WHY they were clearanced? And why would I care? It happened all the time for other systems. A regular event for me was to get the Sunday ads on Saturday so I can get the best gaming deals with the little money I had. Why would I think something's wrong?
A year or so after 32x came out, I picked one up mainly for Knuckles Chaotix. The third party ports weren't bad (Mortal Kombat 2, NBA Jam, and the WWF games were better than the Genesis versions), and I get to play Doom for the first time? Nice! A short time later, I bought Virtua Fighter for $20 to see what The hubbub was about without playing $399 for a new system that didn't have Sonic.
Another thing to keep in mind: gaming retailers didn't have their shit together like how they do today. There really wasn't a store that offered 99% of the games out there, like an Amazon would today. I would find the rare 32x game here and there and be happy to get it for $10-$20. Perhaps the closest to being complete inventory would be old school Funcoland, but only they charged up the ass for new titled and even then , they weren't perfect. (Fun fact, if you have one, check an old Funcoland price guide - they never recognized Spider Man Web of Fire for 32x as released).
And around here, the hype around Nintendo 64 was coming about. Saturn still didn't have a new Sonic, so I didn't give two shits, and the original PlayStation reminded me of Jaguar and 3DO; flashy graphics without the games to back it up. It was only when a lot of my favorite third party franchises started showing up on Sony that I took notice.
But with that, I (with the rest of the world) slowly forgot about those games on the release lists that faded away into memory, like Mortal Kombat 2 and Batman Forever for Sega CD, or Darkstalkers, Street Fighter the Movie, or Castlevania for 32x.
Very rarely did a source go out of their way to say a game or system was cancelled. If anything, new products came to replace that same interest.
