Sony seemed to attack the right market, knew that they had to appeal to an older audience and get people interested. They managed to get a hell of a lot of third party support before it was released, once they had the lead cemented it didn't matter what mistakes they made.
The Saturn was aimed at completely the wrong audience. You need to appeal to the mainstream, then the hardcore, not the other way round. The Saturn was underpowered, rushed out, the western pads where useless, the lack of 3rd party support, the ridiculous $/£400 price tag.
Sony managed to cement the lead so well and completely tarnished the Sega brand that when the DC was released it didn't stand a chance. Hell, Sega even hid the word Sega on the dreamcast!
The Dreamcast deserved better than it got, but with protection so poor, the pirate market killed it before it got started.
Damn shame if you ask me. Some of the best games ever appeared on the Dreamcast.