In 1996 Nintendo could have put a DVD drive in the N64 to futureproof the system; after all, at the time the N64 was released there were several Playstation games that were going to be released on multiple CDs. On top that we have seen DVD become the main movie format so it obviously would have benefited the N64, right?
The reality is that selling a $500/$600 N64 with a DVD drive would have been a massive disaster for Nintendo even if they massively increased the CPU and GPU performance and added way more memory ... People love added features at little or no added cost, but once the price increases beyond what people are willing to pay for a gaming machine the features become a liability.
Sony and Microsoft have gold plated every requirement and sent the price of their systems beyond what most gamers are willing to pay.
