True, but this happened a lot earlier than I think most people know. At the end of 1992, Sega was viewing the Saturn as a 3D console. Some of its design might have been complicated by its 2D origins, and it also did 3D in ways that was weird relative to the PlayStation, but it was a fully 3D-capable machine. It was just very, very difficult to develop for. But from Jan 1, 1993, Sega producer Yoji Ishii took a ton of developers with 3D experience from the arcade division to the consumer division in order to build up the company's 3D capabilities for the Saturn. That's why almost all of Sega's internally-developed Saturn games are 3D games (excluding the multimedia-style games). There are a few like Astal that are 2D, but they were generally not well received at the time. I definitely think there was a stigma against 2D sprite graphics by 1994 within Sega and within most of the industry. The 16-bit market was dying very quickly and 2D sprite graphics were viewed as old in the face of polygons. If there was a concept for a Saturn Chaotix, I can only imagine it was very, very different than 32X Chaotix and would have showed off the hardware's capabilities much more. Maybe something of the style found in Clockwork Knight with partial 3D foreground/backgrounds.