In an Amiazing Amiga US magazine with Lew Eggbrecht, then VP of engineering of Commodore commented on the chip. The Akiko was quickly designed and was fully functional with just one design pass, not requiring mutiple design revisions. It was designed soley to convert square pixels to Amiga planar Amiga style graphics.
That being said a case of too little too late. When Super nintendo had the special mode 7, Sega Genesis had it's own type "graphics chip" kludged onto the SegaCD or certain Genesis carts. Even dreaded SEGA add ons gave you the CPU power of an 040/highspeed 030. Add to that... PC buyers happy to spend $2000 for a fully loaded PC to play Wing Commdander, then Doom from 1990-1994.
The CD32 needed RAW cpu power and GAMES that could win hearts and minds of gamers.
The PS1 really filled that void quite well.