I think it would have increased sales but not to playstation levels. Nintendo launched the console almost a year after its rivals. Playstation was starting to really take off and saturn was sufferig. When it hit it was expensive compared to Playstation and the heavily discounted Saturn.
You always hear rumours of Nintendos indifference to 3rd parties back then. Arrogance almost. I remember hearing EA accusing Nintendo of greed in choosing cartridge over CD (I think it was Nintendo power I read it...). Nintendo defended their decision by stating it was a move against piracy and offered zero loading times. A quick google reveals a CD was $0.35 whereas cartridge was $3.50. I know storage was a big decision when Squaresoft chose to make FFVII. I heard a qoute from ages ago from George Harrison who apparently said at the time "most of our customers wouldnt appreciate such a slow or tedious game as FFVII". Ive heard this a few times but could never verify a source so please, if you know its bullshit then let me know and lll remove it.
But having CD as their main format would have given them an edge and made them more competitive pricewise. But I think Playstation would still have outsold it and had a majority of 3rd party support.
