That's something I'd never considered about and you got me thinking a lot about it these last few days...
There's an infinity of possible outcomes, but, for me, one interesting flow of events would be:
- The SNES CD is released late and overpriced and ends up flopping even harder than the Mega CD.
- Sony abandons the development of video game hardware (without even properly entering it) and the PlayStation is never released.
- Without the threat of the immanent release of the PS1, Sega never releases de 32X and invests much more time in the development of the Saturn. It ends up focusing a lot more on 2D.
- Without any major competition in the 3D gaming market, the 3DO fares a lot better than in our reality. To the point that we have a console war between the 3DO M2 and the Nintendo Ultra 64 in the late 90's.
- Microsoft either buys out or join forces with Sega for the release of the DreamBox (or some other name).
It's pretty hard to predict what would happen in the next 20 years or so, but if things followed a path similar to that of our world, I'd say that by 2023, the three major video game console manufacturers would be Panasonic/3DO, Microsoft/Sega and Nintendo.