Midway talked to NEC Tech or TTi, depending on which version of the story you hear, and were supposedly eager to give exclusive console rights to Mortal Kombat to them. Most reports of this story either give the reason matter of factly or claim Midway mistakenly believed, that the Turbo CD was the best format for a home port, when in reality it was the very worst. The existence of Mortal Kombat for Sega-CD should be all anyone needs to figure out how terrible of an idea it would have been to try cramming the same game into 12 times less space.
I think that in reality, all that ever happened is that someone who was allowed into E3 because they worked at NEC Tech, managed to stalk down an employee at Midway and talked at them. Then years later, they bragged about how they secured exclusive rights to such a hot property and the only reason that they didn't single handedly win the console war that NEC Tech wasn't even a part of, is because mean old Hudson Soft of Japan lacked their amazing vision.
No doubt SGI and Sony people talked to Sega at least once, just as most other companies doing similar business did. But that's not much more of an "almost happened" than making up a 100% fictional "what if?" scenario.
The worst part of these myths that are based on so little, is that every time they're retold, they transform further. Not long ago on another forum, someone talked about how Hudson Soft offered Nintendo their 16-bit console hardware in 1988, but Nintendo turned them down since the Super Famicom was well under way, so Hudson later partnered with NEC and eventually the PC Engine was born.
That Console Wars book shouldn't be taken as a historical record, as it's based around the skewed revisionism of one person who was on one side of the console war. Some Sega fans argue that it evens the playing field, since too much revisionism had already come from people who worked for competing companies. But it doesn't matter which way people are biased, it only blurs the overall picture more and you need a good amount of common sense to wade through all the b.s. to feel out how much might be true.
The only consistency I've noticed from interviews of people who worked in the game industry bitd, is that they all are certain that they did nothing wrong and did everything right. That and everyone has such a hazy memory that they get so many basic facts wrong because they couldn't be bothered to even skim wikipedia before winging their interviews.
