IF Nintendo had gone with CDs over Carts, the major third party companies like Konami, Capcom and Square would have stuck with N64 over Playstation, so yes, in THAT scenerario, they would have won the generation by a landslide. PS1 did not succeed due to first party Sony software (though games like Crash Bandicoot certainly had success). PS1 succeeded on the backs of games like Resident Evil, Symphony of the Night, Tomb Raider, Metal Gear Solid, and most especially, Final Fantasy VII. If those games had come out on N64, instead of Playstation, then obviously, N64 would have likely been an overwhelming success, and PS1 might not have survived.
As it is, N64 did still have some of the highest selling and most sought after games of it's gen, games many PS1 owners (including friends of mine) were envious of, such as: Mario 64, Ocarina of Time, Mario Kart 64, Turok, Goldeneye, Star Fox 64, Diddy Kong Racing, Banjo-Kazooie, Perfect Dark, etc.
N64 had some really great games. It had a glut of platformers, racing, sports and shooter games. Unfortunately, it also sorely lacked conventional 2D games, fighting games, and especially RPGs. Playstation, in that regard, undoubtedly had the more well rounded library, by simple numbers: it had a TON more games released for it, as most top-selling consoles do.
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