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Freakin' Nintendo got way too cocky with their system.

Despite its overwhelming power (96 Mhz vs. 33 Mhz for the PS1), Nintendo crapped on third parties. they thought that with their awesome exclusives, people would make the N64 the dominant system and then the third parties would have no choice but to follow.

The PS1, although being less powerful, was cheaper and friendlier to 3rd parties, and that's what propelled them to success.

 Nintendo's arrogance really screwed them over. Funny how a couple generations change things all around, huh?