The market has expanded quite a bit since then. N64 sold what, 32 mil? and i think PS1 did a little over 100 mil.
By comparison i expect PS3 to be 50-60 million while Wii will be 120 mil+. So pretty much Sony and Nintendo switch places and add 20 million units to each. Not to mention this is an entirely different situation.
Nintendo going into the N64 was very arrogant much like Sony was going into PS3, but the similarities end there. Nintendo chose to go cartridges again instead of CD's which won Sony loads of 3rd party support instantly due to the cheaper costs / more space. Not to mention the N64 came out like 2 years ( i think) after the PS1 giving it a huge advantage. I think if PS3 released 2 years after the Wii (which would mean it's releasing right about now) it would be very hard to pull off 50-60 million units, realistacally more like 30-40 right in line with N64.
Also, the Wii had to come back from the hole Nintendo dug itself into, and had to win back third party support which it's still in the process of.