You also have to note that the expense of cartridges was also passed onto the consumer. N64 games cost more than PSX games.
CDs were also the biggest breakthrough of the time (besides 3D graphics cards) in what it allowed developers to do.
Sega was coming off the failures of the Sega CD and 32X, Nintendo had a lot more clout in the industry.
If both the N64 and PSX used CDs, ports would be a lot easier and cheaper to do. Exclusivity agreements usually expire.







