CD-i member Adri Zeker published a classic Edge supplement which discussed the upcoming future of CD-i in May 1994. A cool feature looking forward: If everything that was discussed in here came true, we would have had a CD-i 2 console as a successor to our classic CD-i format. In the end, it didn't happen as Philips chose a different path, but this route was closer to reality than you might think. On of the key developers, Paul Clarke, comments: "Yes we were looking at using the 68349 as I recall which was more powerful and included in-chip caching whereas the 68079 didn’t even have that."
In 1995 there were many investigations and debates by Philips about the future plans of their gaming business. All came to nothing after various stages of Research and Development. The core business lines were active in both The Netherlands (Eindhoven) and UK (Redhill, London). Unfortunately CD-i was not a commercial success and it wasn't generating money for new investments. The first goal when developing a follow-up to CD-i was to strengthen the 3D performance (many people recognised that "multimedia" was more about games than anything else) so it could become a games console. However Philips overall decided that the games market (then dominated by Nintendo and Sega, those were even pre-Playstation days) was too expensive to enter. It is very possible that Philips in 1995 did not have the resources (financial, technical, managerial, marketing, games software etc) to make it a success. The company was still turning itself around in those days.
However, this is what an anonymous source told us: "The second gen CD-i player was looking at using an arm processor and we used Argonaut at point, to help spec it out (Jez San being the principle there) out of the UK. Then later we looked at doing work with 3DO and Philips met with them up at their offices on a couple of occasions."
Moreover, Argonaut's Jez San confirms the developments on "CD-i 2": "Argonaut worked closely with Nintendo during the early years of the NES and SNES. Argonaut was fundamental in developing the Super FX Chip for the SNES, which was used in Star Fox. Back then, in the early 90’s, the Super FX chip was the world’s best selling RISC microprocessor-- outselling the ARM and MIPS chips by millions in those years. It was only when the PlayStation came out in the mid 90’s that we got beaten on RISC sales. The entire 3D acceleration market that NVidia and ATI now dominate, Argonaut was there first and we’ve got the patents to prove it. After we built the Super FX chip for Nintendo, we went on to design a chip for Philips for a videogame machine that never came out (codenamed GreenPiece aka CD-I 2)."
[Thanks, Paul Clarke]