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That would cause a chain reaction of events that many people aren't really considering. Final Fantasy and Dragon Quest would stay Nintendo exclusive most likely which means they dominate Japan. Playstation was losing to even the Sega Saturn in Japan until Square having to chose Sony because of no CD option on the N64 radically tipped the scales. 

CD format ensures all the Western support as well (N64 actually still got quite a bit of Western support), with the combination of Mario 64, Zelda: OoT, Final Fantasy VII, and especially GoldenEye it's hard to see them not winning North America as well.

Europe would be the only market with any chance for Sony IMO and even there Nintendo would do very well because of GoldenEye and Final Fantasy VII.

I think most Japanese titles past that would be multi-plat even Metal Gear Solid ... Konami would not be able to ignore an N64 with a much larger userbase and the no.1 position in Japan. Resident Evil and all Capcom games definitely multi-plat.

Sony wouldn't be able to gain traction and wouldn't be able to convince third parties to not put their games on the N64 if it had a perfectly viable CD format as well, we saw during the PS3/360 era they weren't able to convince many devs to stay exclusive because it's too easy to port to the 360 and without them having a dominant market position (ala PS2) the whole thing falls apart like a house of cards.

The N64 even with cartridges outsold the Playstation especially in North America for many months until software droughts (which wouldn't happen with a CD format) caught up to the system and people realized there was only like 1-2 games coming per month as the norm.