Whilst it had the Nintendo first-party software, third-party support could have been a lot better. No GTA, no Devil May Cry, no Final Fantasy (meaning main series, not crystal chronicles), a remake of MGS1 when MGS2 was coming out on PS2, no Tekken, Capcom announcing the 'exclusive' Resident Evil 4 was also going to PS2 just before the Gamecube versions' release etc.
Also, I don't remember there being a definitive FPS or racing sim for the Gamecube. So, yes, I think it is to do with software. There wasn't enough variety compared to PS2, which completely destroyed the competition last gen. Even if it did have more games, the perception was that it only had the major Nintendo games.
The Wii is a different story because whilst it still has mainly Nintendo software, it also has opened up new markets, and there is third party support in these newer markets. In the traditional gamer market the support isn't as strong as rivals but with the variety of demographics the Wii appeals to, it really doesn't matter.
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