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Saying Nintendo would win because they put a CD drive on the N64 is like saying PS3 would win if they put motion controls on the system. CDs were not the problem. The Saturn had CDs and we do not hear about the amazing sucess that the Saturn had.  The DS destroyed the PSP despite using cartirdges. Sony won because they got 3rd party support. They placed a HEAVY emphisis on 3rd party support. Moreso than any company ever. Nintendo and Sega had outdated rules about 3rd parties because they didn't want 3rd parties to flood the market with terrible games and cause the Crash of 1983 part 2. 

Sony reduced the restrictions for 3rd pary devlopment by a great deal. Here are some numbers.
PS1 had 2,435 ps1 games
https://en.wikipedia.org/wiki/List_of_PlayStation_games

N64 had 388 games
https://en.wikipedia.org/wiki/List_of_Nintendo_64_games

SNES has 783 games
https://en.wikipedia.org/wiki/List_of_Super_Nintendo_Entertainment_System_games

Even when Nintendo was on top they had nowhere near the amount of games that the PS1 had.  3rd parties wanted to support the console with the fewest restrictions. They no longer had to buy cartridges from Nintendo. They no longer had to censor their games to put it on the system.  Before the Playstation console companies thought that the only way to sell systems was through 1st party software. Sony proved that 3rd party could sell systems too now.  

Sony also had one thing that no other system had: Western AAA 3rd party support.  Western companies like EA refused to put games on Nintendo because they were underpowered and had severve 3rd party restrictions. They were used to publishing games on the PC which had none of that. Here is a quote from Trip Hawking founder of EA. 

Sega-16: According to Steven Kent’s Ultimate History of Video Games, you had a certain “disdain” for consoles, and refused to publish for the NES because you would have had to tone down your games for the hardware. The Genesis, however, was much better suited for PC ports. How long did it take you to recognize that the 16-bit console market was worth getting into?

Trip Hawkins:
 Other than Acclaim, all the American publishers avoided the 8-bit Nintendo and had disdain for their model. None of us at that time appreciated how license fees could be used to subsidize hardware pricing and marketing, and thereby help companies like Nintendo build an installed base.

http://www.sega-16.com/2006/08/interview-trip-hawkins/

Things got better with Sega but Sony destroyed Sega in 3rd party friendly support. For the 1st time sony got western PC games like Grand Thief Auto,Simcity and even Civilization 2! Sure the N64 had some PC games but not as many as the PS1.

Sony also used another advantage. Sell Worldwide. Before the Playstation Europe was not seen as a big market yet. Nintendo didn't really pay attention to them and Sega was too busy trying to win America. The reason why Playstation did so much better than every other consolee was because it sold well in Japan+America+Europe. Playstation wasn't really more popular than the NES in Japan or in America. What made the difference was Europe. Nintendo counldn't really sell there without proper 3rd party support at their 1st party games weren't doing the best there yet.  

Nintendo did a lot wrong as well however this is getting too long. Nintendo did learn from the Playstations. When the Wii came out Nintendo did their best to flood the Wii with games so that they could take away Sony's #1 advantage. Nintendo also learned to sell worldwide with the Wii outselling every Nintendo  home console in Europe COMBINED.   To give Nintendo a disc drive and calling it an automatic win for them is ignorant. Sony didn't win by luck. They knew what they were doing.  Calling Sony lucky is underselling them on what they did.  



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