What was NEC thinking, from the PC engine FX forums:
The PC-FX has several significant disadvantages, most of them related to sprites.
The biggest issue is that it can only draw 128 sprites on-screen at once. These come without any possible rotation or scaling effects, and they will flicker if you put too many of them on one horizontal line. Also, each sprite is limited to one 15/512 color sub-palette just like the PCE.
The Saturn's VDP1, by contrast, can draw so many sprite pixels that it can fill up the screen several times over. It could theoretically draw more background layers and sprites than the PC-FX without even using VDP2. It can rotate, scale, and otherwise warp sprites very freely, and it can draw them at a much greater color-depth. Of course, since it buffers everything, it never flickers.
The Playstation is no slouch, either. While the Saturn is so inefficient at making VDP1 sprites transparent over VDP2 backgrounds that most developers went with fake checkerboard transparencies, the Playstation doesn't have this problem, and it shows in a lot of games.
The problems for the PC-FX go on. It's got a significantly slower CPU, even against only one of the Saturn's SH2s. You're basically limited to 256x240 resolution if you want to use a lot of background layers, and there are no interlaced high-resolution modes. It can do one "Mode 7" layer and one transparent background layer, but no more than that. Video RAM for sprites and the CD drive buffer are only 256 kilobytes each vs. the Saturn's 512. Though it does potentially have more RAM for background tiles, that RAM is also where ADPCM goes, and there is plenty of motivation to want to store lots of that instead since the rest of the sound hardware is so obsolete.
About the only advantage that the PC-FX has over the Saturn is its FMV playback. You can start playing streaming FMV anytime without taxing any hardware other than the dedicated FMV chip, and you can mix it into games however you like. For example, you could easily make an auto-scrolling platformer or shooter that uses FMV as a background.
It certainly would have been possible to make beautifully animated action games for the PC-FX. It sounds like it would have been the most enjoyable system to program, too, and clever design probably could have gotten some surprises out of it. On the other hand, almost every graphically-fancy 2D game from the 32-bit era would have had to have been compromised in some way to run on the PC-FX with little room to compensate in other areas.
User: samiam