Sega had admitted how expensive and problematic the 32X was. Sega decided to make a combined version of the Megadrive/Genesis and 32X, which they felt was a better idea. However, by the time a prototype came out, the Sega Saturn was ready for release. Sega felt that gamers would now not be interested in the Sega Neptune, if it had been released, so the project was scrapped.
Had the Neptune been released, it would have been availible for $400.