From Sega Retro
The Sega Pods is an electronic game originally manufactured by Sega in 1994. It contains three "pods", which the player must hold their hand over in order to play a series of games. Each pod comes equipped with a special sensor that can detect the height of the user's hand (as long as it's below twelve inches). There are seven built-in games.
When initially released in 1994, Sega carried over the "WELCOME TO THE NEXT LEVEL" marketing strategy used with their consoles, comparing the Sega Pods to the classic electronic game, Simon. This is because games 2-4 are an extension of Simon - many of the games simply have the player re-create the random pattern generated by the internal computer.