You also have to take into account that when Square left, they pressured Capcom and Namco to follow suit, so the exclusive IP to Nintendo then would have remained exclusive (Final Fantasy, Megaman, Tales series, etc). However, I still think Konami would have released MGS on the PSX, followed by the N64 after abysmal sales.
How would it have went? 3rd parties would have considered Sony, like all other electronics companies that tried to get a foothold in the market (Philips, NEC, LG, Matsushita), it was too big of a risk to invest in, and Sony would have bowed out of the games industry before the generation was even complete. The reason why they succeeded? Revolt. From all of the major 3rd parties, at the same time.







