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Man, Spurge, you sure do know how to phrase a thread title to get people excited. I saw this thread and clicked so hard I probably crushed my mouse :)

Everyone has covered all the reasons pretty comprehensively: cartridges, the consequent drop-off in third party support, marketing, etc.

Still, it's not like the N64 and Gamecube were disasters. Even the Gamecube, which sold only 21 million units, was profitable for Nintendo. And let's not forget the games: Ocarina of Time, Majora's Mask, Super Mario 64, GoldenEye 007, Excitebike 64, Perfect Dark, Paper Mario, Conker's Bad Fur Day, Metroid Prime, The Wind Waker, Mario Kart: Double Dash!!, Pikmin, Resident Evil 4, plus a lot of great multiplatforms games on the Gamecube.

I would also argue that by ignoring third-party games and focusing on (and protecting) first-party games, Nintendo lost the battle but might win the war. As more and more games go multiplatform, exclusives will matter more and more.