With several companies jumping on the 'Compact Disc' wagon, also Atari was exploring the possibilities to integrate CD technology in their standards. Instead of purely backing their own format with Commodore's CDTV, Atari was also developing a standard that also supported CD-i. Their 'Falcon' system was kind of an umbrella system that would incorporate several standards, including Atari's own UNIX based TT technology. Atari at that point, made a decision that CD-i was going to be a world-wode standard and that it should be embraced just like CD-ROM. They never had a license to produce CD-i drives but they were exploring the ways of getting a license, according to Philips Interactive Media. It made most sense to buy the drives from Philips or Sony, by that time still both supporting the CD-i format. In the early years of CD-i (1985-1988), several other companies were exploring ways to join CD-i, but the long and complicated development road had too many obstancles for certain companies, including Atari. A true Atari CD-i machine never came to be, but this news alert from 'New Computer Express' dated July 1991 shows they certainly had plans to develop it. Atari at that time announced various machines that in the end never came to be, but the inclusion of CD-i is remarkable even for a big company like Atari. Thanks to Wrestling with Gaming for this news!
CD-i member Videogame Obsession made a clever remark about this news: "Philips apparently seems to know nothing of these plans".. Yep, that sounds about right of Atari at that time. Sam Tramiel said a lot of crazy stuff back then! Also stating that the Jaguar was "way more powerful than both the PlayStation & Saturn!"
[Thanks, Wrestling with Gaming, Videogame Obsession]