Nintendo would’ve been a wholly owned subsidiary of Sony, or at least absorbed into Sony in some way. Sony’s contract called for all games produced for the “Play Station” to have their rights relinquished to Sony, including Nintendo’s. Keep in mind that Sony was and still is an electronics giant, and Nintendo, while still pretty big, was a much smaller company. As for the games, I imagine it would largely be like the CD-i: lots of slideshow games, ‘educational’ games, and the Flowers of Robert Maplethorpe. Check out some of the more primitive 2D PlayStation RPGs for some hint of what might have been the better SNES CD games.
Suikoden comes to mind.
Most games start you out really easy in the beginning and ramp up the difficulty to the maximum in the final level. But for RPGs it’s just the opposite - you begin with the game with no items, terrible equipment, the worst stats you’ll ever have all game, no skills, and no money. You are at your absolute weakest and can die from even a mouse bite. But by the end you are more powerful than god because you possess the best equipment, world destroying magic, and are drowning in items. And that’s not even taking into account the ability to grind levels to make it even easier still.
It’s just kind of funny that RPGs are the only genre where it gets vastly easier the further you get in the game. It’s interesting from a design perspective.
Edit: RPGs aren’t the only games where you can improve your character to get a gameplay handicap. Megaman, Zelda, even Mario 3 does it.
The fact that Pokemon came in different versions might have helped the social aspect, but locking out content was really annoying, and is pretty irritating as the series moves into a real internet age. You should be able to Catch ‘em All on one cart, no trades.