CAUTION: Off-topic post follows.
3dfx did an awful lot of things wrong. They were also somewhat unlucky (and, it has to be said, fantastically lucky at the start).
The original voodoo 1 ought not to have been a success. It was originally envisaged as a $400 niche product. Then there was a massive (and unexpected) crash in the price of fast EDO RAM which meant that it could actually sell for $299, and that made it affordable. All of the other manufacturers had come up with products that would have been affordable without the RAM price crash, and were thus leagues behind 3dfx in performance terms. (This, incidentally, is why John Carmack did a native version of Quake for the Rendition Verite, but not for the Voodoo - without the RAM price change, no one would have bought a Voodoo card, so he imagined there would be no market for it.)
3dfx's next move was to try and produce a combined 2D/3D card by using something resembling a voodoo 1 core, combined with a 3rd party 2D chip. The Voodoo Rush was a disaster, and no one wanted it.
Voodoo 2 was 5 months late, but still about a year ahead of anything else, and Voodoo 2 SLI kicked arse.
Six months later Voodoo Banshee was a step in the wrong direction, though; good 2D performance (unlike the 3D-only Voodoo 2) but usually much slower in 3D. Nobody liked it.
Voodoo 3 wasn't a bad card, except that by that time consumers had started to get used to 32-bit colour. 3dfx assumed that a 16-bit-only card would be acceptable. It wasn't. Nvidia (after some truly godawful early products - anyone remember the original Riva? let alone the NV1!) had finally come out with the really rather good Riva TNT2.
3dfx also made the (with hindsight) very bad decision to buy up card-maker STB, and only sell voodoo 3 chips on cards that they'd made themselves rather than selling to third party board-makers.
They were unlucky in losing the contract to supply the graphics chip in the Sega Dreamcast to PowerVR at the very last minute. (They later successfully sued Sega for breach of contract, but they'd have made more money if Sega hadn't welched on the deal).
Voodoo 5 could have held its own quite well against the original GeForce 256 (Nvidia dropped the ball on that one - they were aiming for a 200MHz clock speed, but had to drop it to 120MHz to get it stable). But Voodoo 5 was so badly delayed that, by the time it was out, it was competing against GeForce 2. And, while the T-Buffer was an interesting idea, what customers really wanted by then was onboard geometry acceleration.
And that was it. It's sad that 3dfx went under when it did, though - apparently their next chip, the Rampage, was only 2 or 3 months from being launched at the end, and the rumours made it out to be an absolute killer.
Ah well, Requiescat In Pace, and one hopes that the cooler features of Rampage eventually made it into Nvidia products.