I've been reading all your input, and doing a little of my own research on this subject, and I've come to the conclusion: releasing the TG16 earlier in the US would not have helped.
Nintendo didn't let its 3rd parties loose until 1990. Releasing the turbo before that is futile. It only worked for Sega because their in-house games (especially arcade games) were so popular at the time.
So, given this scenario, I would actually wait until the Supergrafx came out in Japan, and release THAT stateside as soon as possible.
This would have 3 benefits:
1) none of that 'it's only 8-bit' nonsense (not to mention the edge in specs)
2) Can release back library in 'compilations' or with SGX upgrades (more value for money in the eyes of parents vs. Genny and SNES)
3) gives Japanese developers a reason to develop for the SGX.
Also, to pre-empt the whole videogame violence controversy in '94, I would have the US SGX have a built in rating system. Parents set the rating of games that are allowed to play. This lets us get away with releasing risque titles stateside, and still look like the good guys.
Finally, I'd build in the things NEC wanted to release as accessories; the system has a 5 player tap and File cabinet built in. (the built in file cabinet would be almost a neccesity to accomodate storing the 'allowed rating' info.)
The CD system, however, would still be separate.
What do you all think? am I crazy?