The project was largely driven by Sega of America; a more successful, separate, and officially released attempt at a virtual reality headset, the Mega Visor Display, was overseen by Sega's Japanese amusement divisions and United Kingdom-based collaborators Virtuality, and would be used in the VR-1 theme park ride and the Dennou Senki Net Merc arcade game.

[1] The Sega VR's design was based on an IDEO virtual reality head-mounted display containing LCD screens in the visor and stereo headphones.

The method employed was only capable of tracking two degrees of freedom but was very inexpensive, costing only around $1 per unit, making it affordable for the consumer market.

Sega officially claimed to have terminated the project because the virtual reality effect was "too realistic", so users might move while wearing the headset and injure themselves.

[2] However, Tom Kalinske, then president and CEO of Sega of America, stated that the system would not be released due to reports of it inducing motion sickness and severe headaches in users.

[1] Alongside the attraction, the MVD was praised in reviews at the time for its advancements in ergonomic design and graphical output, and was supposedly not fully matched in performance until the 2010s.