I was aware and I was making a joke since he was so influential to Sonic.
In all seriousness, regarding the OP: I think it puts Nintendo in a very precarious spot. 3rd party devs even this early on hated working with Nintendo due to... well, I think how they tend to treat them is pretty well known by now, but having Yamauchi in charge didn't help (like it came out recently when Squaresoft told him they were having problems with FF7 on the N64 and wanted to move to the PlayStation he told them to pound sand and never come back). Sega more or less always had the better working relationship in this era so far as I know and coupled with Sony's CD factories that's a deadly combo indeed. But Nintendo might be forced to adopt the disc medium much sooner because of that fact.
Regardless, Nintendo's strength is in its IPs and, much as I do like Sega, they simply don't have the same 'oomph' that Nintendo does, especially in pop culture. I could see Nintendo merging with another company or seeking assistance from them in the future if things get bad enough. Microsoft seems like the perennial possibility given Bill Gates' interest in the video game industry or even Bandai, which there were talks of a merger OTL but they flat lined due to questions regarding monopolies in Japan, or someone else entirely. Alternatively, Nintendo unlike OTL might become more aggressive in acquiring 3rd party studios to compensate for the better relationship Sega and Sony would have. Capcom and Squaresoft are distinct possibilities if they could somehow convince them; perhaps even Game Freak to secure development for Pokémon if butterflies don't land on it. Western alternatives might be id Software or Maxis as they were on pretty good terms with them too. Maybe they snap up Rareware permanently? Decide not to screw over DMA Design?
One wonders what that means for NEC and The 3DO Company or, heck, even Atari too.