By the time Pippin was due to be released, in 1996, the market was already dominated by the Sony PlayStation and Sega consoles, machines which were generally a lot more powerful as a games machine than the more general purpose architecture of Pippin. In addition, there was no ready-to-go software for it, since the Mac traditionally has not attracted huge amounts of games development. It was also expensive - though touted as a "cheap" computer, this was only true if compared to the Macintosh - it was far more expensive than a Playstation.
Pippin was aborted before it even reached the market. In hindsight this seems to be a wise decision, as its success seemed unlikely. Since Apple were struggling to stay afloat at the time, another marketing disaster would have been a severe blow.