Why do you think that so many companies that were exclusively on the PS1/PS2 jumped ship to the Xbox 360 early on? Why did so many exclusive Xbox 360 franchises jump ship to the PS4? Companies go where the money is.
The SNES lost ground to the Genesis (Sega's second home console) because the Genesis had a huge headstart. People mostly bought one console back then.
The PS3 lost ground to the Xbox 360 (Microsoft's second console) because it had a huge headstart.
With the PS1, Sony was unproven in the home console market and lackluster as a third party company. People actually waited until the N64 came out and initially it was on fire...then, new games started taking forever to come out. PS1 versions had more content. PS1 got tons of exclusives.
The PS1 was simply the only viable console that could produce the kind of experience that developers wanted to make at the time. Cutscenes, symphony quality music, large worlds, tons of voice acting.
If the N64 could deliver that, and was still twice as powerful, and still only $199 at launch, I just don't see how developers could ignore it. The N64 was a powerful powerful console. More powerful that PCs when it launched (if I'm not mistaken). The Nintendo name was still strong. We can't change history but I think things would have been drastically different.
What I said was clear, but I don't have any problem to repeat it. The basic problem was about Nintendo, not a console which mistakenly was decided to have cartridges. We had already seen a generation before that Nintendo was losing ground and this had to do with their policies. Monopoly, high prices, big compromises and restrictions for the 3 parties. So, this is why many developers moved to genesis, because their product would have a much better support and sales to this console, when Nintendo for one more time,would somehow sabotage them. And what happened with the Playstation is the natural evolution to this story. Even with the defeat of N64, Nintendo didn't seem to change their mind. They continued the same strategy. We promote our image for our customers and not for a widen audience. It's not strange that the second console of Nintendo lost its ground despite its win over Genesis, while the PS2 not only had a much bigger impact in the industry, than its predecessor but also established Sony as the No1 brand in gaming.
It's not about the format, it's not about the power. There are many other factors that determine if a console will win. Obviously, with a CD format, N64 wouldn't have lost FF, but who tells me that Sony in the end wouldn't have succeeded to bring it to its own console too. But, that would only have effect in Japan. Not in Europe where Nintendo was nonexistent, not in ROTW. Even in America Nintendo had lost about 10 million customers (It's a miracle how N64 achieved the same numbers as SNES).
As for the examples you mentioned I want to make some comments. Because a console has a headstart that doesn't mean it's going to be a victory for it. PS3 had been losing ground the first year due to its high price and hard development for the developers. But, in the end it achieved to make the same numbers (even a little more). Wii U had also a headstart but we know how it ended.
But, one more thing. We can't compare Sony and Nintendo. Two completely different ways of thinking. Sony despite the fact that was losing a generation achieved a come back. While Nintendo since 1991 where they started losing momentum untill today, continue to stick with their old and out dated methods. So, yeah I still have many reasons to not only believe, but to be sure that N64 would have lost.
And of course, many developers would have really liked to bring their games to N64, but Nintendo would have kicked them out with their logic for one more time.