Something I think younger gamers might not realize is that gaming was very much for kids back when the NES and SNES were out. That's how it was presented, that's who used it, and if you were an older teen or beyond who played video-games, there was more than a bit of frowning by society in general. It was seen in the same light as action figure or toy guns. The situation, though, was that the people who played video-games were growing up. Quite a few dropped off, of course, but plenty more still wanted to play. Some were looking for something a bit different.
I know I drifted away from gaming during the life-cycle of the SNES. It was better than the NES, obviously, in what it could do, but somehow I thought it felt like more of the same. The fact that I played and was blown away by Final Fantasy VI actually made it worse, as I could find few other games with that same kind of deep experience.
Then Final Fantasy VII hit and it was like a bomb went off in the gaming world. In my opinion, that was one of the more influential events in gaming history. I credit FF7 with luring back a lot of the people who had grown a bit weary of gaming, with winning people who had never thought much of gaming, and with giving non-gamers a reason to take the medium a bit more seriously.
The PS2 took that acceptance a bit further and was the first time, that I can remember, where there seemed to be almost no social disapproval to an adult/older teen owning one. In that regard, I don't think it was anything that Nintendo did, but rather that they made very little effort to adapt to a changing market. I think that's when some people began to look at Nintendo critically and say, "you know, I want to try something different, thanks for the memories."
As far as I can remember, the N64 was respected, it just got pwned by what the PS1 had on offer. Some people during that time struggled with leaving Nintendo. The GameCube, though, was the one that people made fun of, both for how it looked and how the PS2 had so much more variety. In particular, I remember people my age getting excited over SOCOM and Medal of Honor. Personally, the JRPG onslaught was what made me jump to Playstation.
