Sega USA were asked about this and their reply is as follows:
"The Sega Vision is a real device", a spokesperson said, "But it is not intended as a re-entry to the gaming hardware market or a rival to Sony or Nintendo's systems."
"Sega is committed to remaining a software third party in the videogames industry, but also has several non-games products in the market. The Vision is primarily an MP4 video player with some basic games functionality, and not a new handheld gaming machine."
The Sega Vision is in fact a Chinese made iPod style PMP with mobile phone style java game functionality.