Admit it. You loved SEGA. Even if you didn’t buy the Dreamcast or Saturn, if you couldn’t afford the Sega CD and wanted no part of the ill-conceived 32X, you were still sad to see the mighty Genesis-maker bow out of the console hardware arena.

Don’t worry, you still don’t have to feel guilty about not buying the company’s upcoming gaming device, the SEGA Vision, because it’s not a gaming device. The company has flatly denied rumors from last week that the Vision is a “PSP beater,” as reported by Register Hardware.

Unofficial RPG Site had their doubts about the original story, so they asked SEGA for an explanation. The response:

The Sega Vision is a real device, 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.

Unofficial RPG Site then says that upon further investigation, the Vision is actually a Chinese-made iPod knockoff, rebranded with SEGA’s name. The games are just Java applications that you’d find on a mobile phone. And Register Hardware notes that while the device won’t be released until next year, it’s somehow available at an arcade skill crane game in London.

Now for an admission of our own: The whole thing sounds fishy. [Thanks Joystiq]