Sega looked at every viable 3D techology from 1994/1995 to 1997 before deciding on PowerVR2.
Before the PowerVR2 based console was selected, Sega looked at
1994-1995
Lockheed Martin Real3D (Real3D/100)
1995-1996
Nvidia (NV2)
Lockheed again (Auburn / i740)
3DO M2
first-gen 3Dfx (Voodoo Graphics)
PowerVR Series 1 (PCX1, PCX2)
PixelSquirt ????
(1997)
second-gen 3Dfx (Voodoo2, Banshee)
PowerVR Series 2 (Highlander)
Sega selected PowerVR Series 2 and got a custom chip designed for their console (PowerVR2DC aka CLX2).
The price/performance of PowerVR2 was unbeatable, but that might not have been the main reason for its selection. Although Videologic designed it, the chips were manufactured by NEC, a Japanese company, Sega wanted to remain loyal to Japanese if possible, and 3Dfx gave Sega the perfect excuse to do that--In April 1997, 3Dfx royally pissed Sega off by revealing the existance of the next Sega console in their Initial Public Offering.
Sega killed the Black Belt console which used a 3Dfx chip. 3Dfx then sued Sega after that, and Sega later settled with 3Dfx.