I was working at Palm (subcontracted end user support) when this project was announced.

The first thing my mind went to was 3D games because Palm had just announced that the next iteration of their chip would have a PowerVR based mobile capabilities and the teams at Sega had just finished a number of years making games with the Dreamcast (also PowerVR).

I never heard of these games, and a couple of years later Palm was pretty clearly irrelevant (although that did not stop me from acquiring a dead-end Treo 180g device).

I honestly don't think they could have pivoted to save themselves, everything about their interface was wedded to the stylus interface.