Only major disagreement I have with the above is Virtua Boy sticking with carts. Remember, it was released in '95. And it was a more-or-less "portable" system. And, most importantly, you held it to your face. Too many moving parts, too fragile a concept, and too much heat generated.
The mistake they made with Virtua Boy was in not waiting a year for LCD tech to get good/cheap enough so that the whole console wasn't merely "repeatedly scan a red laser across your eye." A more-than-one-color Virtua Boy, with non-headache-inducing LCDs could have possibly saved late-90's Nintendo.
Sega: waiting until 1999 to release the DreamCast. They knew Sony was a juggernaut, and they knew Saturn was ready to be cannibalized. If they'd had a 2-year head start instead of just the one, they may have had enough momentum to get over the "zOMG EMOTION ENGINE!" hype, even with a machine that really *was* inferior to the PS2.
Nintendo: waiting until 2001 to release GameCube. The last two years of N64's life were agonizing. I think Nintendo played their cards well with GameCube, maintaining market presence and positioning themselves so that Wii's success would be possible, but they could have stopped the bloodletting that was happening on N64, similar to how Microsoft would later do with the original X-box.
Nintendo: Not figuring out a way to get into the European market with the NES. Seriously, if it weren't for Nintendo's lack of presence in Europe, Sega may have never gained foothold with the Master System, and would have had a much harder time marketing the Genesis. I know there were legal problems with Atari, but Atari was dead by this point, and I imagine *some* settlement could have been reached. Nintendo has historically done poorly in Europe (Wii seems to be changing that), and almost every prospective competition has used this fact as a trojan horse.
Microsoft: Buying Rareware. Rare is the kind of development studio that is only useful if you're already dominating. They'll give you an assured smash hit every two years or so, but basically their games will only be attractive to people who already purchased the console (with the exception of maybe Goldeneye). Nobody bought an SNES for DKC. They had an SNES already, and DKC was a kick-ass game they could brag about to their Genesis friends. Nobody bought an N64 because of Banjo-Kazooie, but it was one of N64's top-selling games. Likewise, the people who bought Grabbed by the Ghoulies and Perfect Dark Zero were already X-box fans. If X-box had been a stronger platform, Grabbed by the Ghoulies would have been a much more important game than it was, and Perfect Dark was simply overshadowed by Halo.
Sony: E3, 2006. No explanation needed.
Sony: Half-assing the PS2 hard-drive almost as badly as Nintendo half-assed GameCube's online functionality. If they'd added $10 to the price and made it more like what the 64DD was supposed to be, then supported and advertised it decently, it could have seen success on par with Eye Toy.
