Well Nintendo and Philips only had one deal, so it wouldn't be back tracking 3 times, they would be going ahead with a N64 CD drive instead of a Super NES one, which frankly is a way better deal for Philips if Nintendo felt like they wanted to work with Philips. If not them, Nintendo did end up working with Panasonic and IBM on the GameCube and both of them made CD-ROM drives, but so did numerous other companies as I mentioned like Toshiba, Hitachi, Fujitsu, JVC, NEC I'm sure would've been happy to supply Nintendo with a drive if asked.
Cartridge slot really doesn't cost much at all, don't see what would be problematic about that at all.
For that gen especially where 2x speed CD-ROM drives were pretty slow, having a fast cartridge in combination with a CD that could just handle large textures, audio, video, voice data, etc. would've been actually a pretty kick ass setup for Nintendo/Rare games. A game like Star Fox 64 for example could've off-loaded all the voice data onto a 5 cent CD instead of using up like 1/3 of the cartridge's space for voice audio. 3rd parties probably just would've made CD-only games, but who knows I could see things like fighting games being cart + CD combo (Street Fighter III was rumored for the N64, but I think there were cartridge space limitation issues). You could probably do other things like use the cartridge (say 8-16MB) as a faster higher speed texture cache of sorts and have the disc just stream textures straight to the cartridge to hold.
If anything I think what would've happened is maybe Nintendo would've amalgamated the cartridge slot and RAM Expansion slot the N64 had (it also had an expansion slot on the bottom of the system for the 64DD which wouldn't be needed ... so it had three high speed ports ... people forget that. You could lose one of those slots, maybe even two. The Saturn's cartridge slot for example could run both cartridge games but also it could run the RAM Expansion, so probably that would've saved Nintendo a few bucks.
And Sega Saturn is a perfect example of a system that tried to accomplish 2 different things on the system with the 2D and 3D processing and failed because that added complexity and cost. But sure Nintendo could have changed mind again and made a N64CD+Slot for the same price.
Yeah but that's a different issue, their *chipset* for the Saturn was more of a 2D processor than a 3D one.
The format really didn't hurt it though.
I think there's no real point in ditching a cartridge slot, cartridge slots really don't cost that much, so when people position the debate as "cartridge vs CD!" it didn't really need to be that way at all.
I mean even Nintendo by announcing the 64DD basically the same time as unveiling the N64 was basically conceding even at that point that cartridges alone weren't sufficient. They should've just swallowed their pride a bit at that point and just agreed to add in a CD drive.