The Phillips CD-i Zelda games really didn't have to be as terrible as they turned out. It all started when Nintendo and Sony got into a messy fight about developing a CD-based video game system and brought Phillips into it. That was entirely Nintendo's fault. Thing is, acquiring some Legend of Zelda character properties wound up being Phillips' consolation prize for basically being the hot boytoy Nintendo used to make Sony jealous, not realizing it would lead to a messy divorce that would screw everyone over except for Sony.
The Zelda game properties for the Phillips CD-i actually started out promising, despite the almost total lack of involvement from Nintendo. Philips brought in Dale DeSharone, a developer famous for the critically acclaimed RPG adventure game Below The Root. Then things went to crap.
The release of the Phillips CD-i system kept getting pushed back. DeSharone's supervisor, Steve Yellick, took his own life during the early development stages, which made him now the lead of a project he wasn't really planning on investing years into, but now couldn't escape. Philips insisted on sticking with 1987 technology, despite the release date inching closer and closer to 1991. Budget constraints meant the cut-scene animation for two of the three games was farmed out to Russia, leading to the histrionic flapping mess of a "plot" that the internet has made fun of ever since.
Phillips justified screwing over DeSharone and the rest of the game design team because they wanted the CD-i to be a "multimedia system" rather than just for games, which they practically sneered at. In the end, however, Phillips lost a billion dollars with the CD-i experiment, which serves them right for dragging these classic characters through the mud.