Price had nothing to do with it IMHO, just think not even 3 years later the Playstation 1 came out and it had a $300 dollar price tag and it sold like crazy. Again, as many people have pointed out, if we saw half of the killer apps the Japanese were getting we all would be singing a different tune.
The PCE had no "killer apps" in Japan. What it had was a very diverse library of B grade titles. Unfortunately Americans in the days before FFVII were still very reluctant to read in a video game, and also had not developed the lolicon scene enough to appreciate most of these titles. Example: try selling one of those shitty WWII or Arab killer fps games to people in Saudi Arabia. They just won't want it. Another factor is that the PCE started out strong, but the popularity trickled down as the games got more otaku-based and the hardware improved. In the US the TG-16 was never successful, so asking people to pay more for a derivative of a 3/4 year old machine that nobody gave a shit about to begin with...wasn't going to work. All of those B grade RPGs and sims in Japan worked with each other to solidify a very devoted fan base. The audience got smaller, but it also became way more hardcore. We didn't have that here.
As for price...at the risk of conflicting with several hard core fans' reality distortion field, the Duo wasn't worth the money to most people. Bonk is not as technically impressive as Sonic the Hedgehog. The same can be said for Y's versus Chrono Trigger, Final Lap Twin versus Super Mario Kart, or Neutopia versus Zelda: A Link to the Past. Don't get me wrong, I
actually did buy a US Duo in 1992. I loved it. I mainly bought it for the Japanese imports that none of my friends were interested in.
As for the PS being the same price three years later, well, come on. Are you just quoting wikipedia or are you only 20 years old or are you just senile? Don't you remember how much the the PS f*cking AMAZED people back then? "Three years later" was post-polygon. The PS was doing nearly arcade perfect version of stuff like Ridge Racer, which was still a nearly state of the art game and a top earner at a lot of arcades. The PS was the hottest shit on the planet from the time it was launched until the DC came out 5 years later. It was the first polygon-based affordable mainstream console.* You could also buy it at a lot more places. The Duo was never anything like that. You show people the opening for Kabuki Den and they go "wow!". Then they see the game actually begin and they say, "Um...is this a NES? Why is the sprite so f*cking small?" Lords to Thunder blew people's minds, but Ninja Spirit...did not.
$300 for a console you've never seen run in person was a lot. Minimum wage was $5.25/hour then. This was before everyone had a $100 monthly bill for their iPhone and the overriding lust for technology. Hell, people still paid for music back then, that's expensive. Twenty years of inflation ago...$300 meant more to teenagers then.
I love the PCE because its like a NES, but with no flicker, way more color, and endless storage capacity. The Duo was the ultimate 8 bit system, but that's all it was. I love it specifically because of that, but most people don't. People who had been playing Comic Zone, F Zero, Mortal Kombat, etc were not impressed by Exile or Parasol Stars. And its not just the big time games, its the small stuff as well. Wild Guns...Wild Guns is really beautiful. I'm sure somebody can show me an bunch of screen shots and write out some technical stuff about how Wild Guns could easily be done better on TG16, but it doesn't change the fact that it wasn't. Neither was FFVI (or FFIV, for that matter), Out of this World, Yoshi's Island, Virtua Racing, Phantasy Star IV, etc etc. I know you guys don't care about that stuff. That's why we are here. I know the SNES is "gay" or whatever, but that's irrelevant. What matters is that people won't pay twice as much for a system that appears to be half as powerful. They think Wonder Boy is f*cking SHIT.
The CDROM was amazingly underutilized. It might as well have been a 1TD HD since you can only hold one microscopic portion of whats on the CD in memory at any given time and then play songs of the CD, usually really bad songs.
I just don't see how there is any way the Duo could have succeeded in 1992. American's simply weren't into that.
* Shove it up your ass, 3DO fans. Nobody wants your garage sale piece of shit system. The controller sucks and the library is terrible.