By ignoring some facts, of course only Nintendo had fault in this, Square and Sony didn't do anything wrong to you.
Nope, Square and Sony did nothing wrong as far as I'm concerned.
I'd also say the only thing Nintendo did wrong was not making themselves a more attractive partner to keep working with. So I'm not even saying they were "bad", just that working with Sony was a more attractive proposition. I mean, if your supermarket charged ¥1000 for a newspaper and then another store opened nearby that sold the same newspaper for ¥400, why would you keep buying the more expensive one?