The design of the system itself hurt it alot. It really couldn't be portable and you needed the legs to be intact in order to support the bulk. The fact that the color scheme was strictly red and black was another strike against it. Add that to the fact that it was a pretty hefty price tag (I believe $250) and that it was being released during the big next-generation wars at the time (1995), the thing really didn't stand a chance. As Silent noted, there were some risks involved in using the Virtual Boy. I remember playing it at a Target and being dizzy once I stopped.
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