From what I've seen it's shocking how arrogant Nintendo behaved towards third parties when developing the N64. Nintendo actually believed that people bought the NES and SNES just to play Mario and other first party games and thought that it was a privilege that third parties were allowed to develop for their systems in the first place. They basically told Square to screw themselves when Square asked to be able to develop FF7 on CDs.
Nintendo basically got what was coming to them when third party games pushed the PS1 far ahead of them. It took a while, but they finally learned that they need third parties to push units. They still made stupid mistakes with the Gamecube mini disk and making the Wii U so weak, but they have at least tried to court third parties since the N64 cartridge debacle.
The N64 with all of Square's JRPGs as exclusives plus most of Sony's third party support either as exclusives or as multiplats would have trounced the PS1.
And if the Playstation hadn't been such a success Sony likely wouldn't have made the comments which goaded Microsoft into the market.
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