I've heard it said that when empires are failing they often do the one thing that is the exact opposite of what they should do. That was the Gamecube. But it's not where things went off the rails for Nintendo. That was clearly the N64. Not having CDs and losing the exclusive 3rd party relationship they had with key companies like Squaresoft did dramatic damage. N64 had a strong western following, but there were already signs of older gamers preferring the Sony brand toward the end of its life. With the release of PS2 Sony was on a role and it would have taken a truly dramatic showing from Nintendo to even be considered as an option no matter what it did. Things GCN did wrong:
-A message of a "gaming machine" when others were pushing a "multi-media device". It's hard to grasp right now, but back in the day it was still somewhat new for adults to want to game. So calling something a media device/DVD player made it way easier to accept. Major fail on Nintendo's part.
-Purple fisher-price look
-Baby-sized discs
-Weird versions of Mario and Zelda
-Late launch
-Loss of Rareware, Retro not able to replace.
So yeah, they went off the rails entirely there. But even if you correct all that stuff, they still had to contend with the fact that Sony had Final Fantasy and GTA as exclusives. That's an impossible hill to climb. You're talking the biggest western title and the biggest eastern.
Nintendo would have had to not only correct GCN's flaws, but also go beyond and get aggressive and made some decisions with foresight. What could have turned things around:
-Secure Rockstar North as a 2nd party studio and endorse the production of GTA (haha)
-Bought Bungie and had Halo as an exclusive/Goldeneye follow up.
-Been aggressive and supported Square when it was bleeding money in 2000, and brought the FF brand back to Nintendo exclusively.
Those things COULD have made GCN a worthy PS2 challenger, but let's be honest. They were on the exact opposite of Nintendo's actions at the time.
