Commodore was simply too late, it's fate was sealed by not producing the AGA chipset (or something like it) by 1990. Had it been released in 1990, it would have crushed the Mega Drive, and developers would have most likely written CD32 specific games, because the Amiga was still a viable market back then.
AGA was possible in 1990, but C= choose to milk the OCS/ECS chipset for 5 years, which is insane in the semiconductor/computer business! Every product made from 1990 onwards were 2 to 3 years late. Even if the banks gave Commodore a little more time to produce more CD32s, they would have been out of business by 1995. The new CD consoles from Japan would have struck the killer blow, rather than C='s creditors back in April '94.
"Commodore -- Too little, too late™". That about sums it up for me.