@justin258: You're leaving out a key part of the history here. And that's Sony screwing everything up with its weird shape buttons. Not only did Sony not use letters but it also had DIFFERENT buttons for "accept" and "cancel" in Japan and the West. Apparently in Japan X made more sense as a cancel button while O made more sense for "accept" but in the West because we uses X to cross off boxes on forms to make our selection it was confusing so it got swapped. That meant that for most games the lowest button on the diamond was accept in the west while the rightmost button was cancel, and that was swapped in Japan.
THEN Nintendo made the N64, which did not have a standard diamond, and the PS1 was dominant in that generation, meaning that by the time Sega made the Dreamcast the actual standard in the West was bottom button accept, rightmost button cancel, and Sega followed that.
Further complicating things is the fact that in Japan text is read right to left while in the West it's left to right (depending on how you define the west.) That's also why the A button is all the way on the right in Nintendo controllers, which doesn't really make sense from a Western perspective. So if A is accept and B is cancel it makes sense that Microsoft, a Western company, would have their buttons configured left to right, and the A button thus on the bottom of the diamond, matching Sony's layout (which was dominant at the time with no actual competitors on the market, since N64, again, did not have a diamond) in the West.
So it's not really Sega's fault. They were following Sony. And Microsoft was following Sony and what made sense in the West. It was the right decision at the time, and Nintendo should have caved in the Gamecube era, when the Sony layout was REALLY dominant (and by that time Sony had standardized somewhat to using its Western layout even in Japan) but Nintendo is Nintendo so here we are.
ETA:
For the N64 the A button was the bottom button and the B button was shifted to the left and up so "bottom button is A/Accept" was totally standard across all systems at that point. It's also the lowest button on a Saturn pad.
And Gamecube controller's button layout is just weird, so "Microsoft should have followed the SNES even though everyone else in the industry including Nintendo was not" is a HOT TAKE!!!!
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