Not sure about the SNES CD but in the long run a team up of Nintendo and Sony could have been a beautiful thing.
As others have said, Sega would still be making consoles and Sony would have likely helped drag the mainstream towards Nintendo. The PS1 attracted a lot of older gamers with more "adult" themed games and had the "coolness" factor that Nintendo lacked - all of that could have been absorbed by whatever the N64 would have been.
I love Nintendo, but feel they've been on wobbly ground ever since the N64 when it comes to the competitiveness of their variety of games. The quirky decision to remain using cartridges made life a bit more difficult for third parties and was the start of Ninty's smaller shelf in the game shop, with the narrower variety of games.
A team-up with Sony may have prevented this from happening. I do not believe that Sony have always been "horrible" at marketing. The Walkman became synonymous with personal stereos and the PS1 adverts pushed the lifestyle angle and for the first time games were not just for kids http://www.youtube.com/watch?v=6Bqq38WZctA
Nintendo could have had some of that action, kept their identity AND been even better than they are today in partnership with Sony.
Too much planning, and you'll never get anything done.
Karl Pilkington.
