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The N64 didn't lose because it still used carts. Or at least that's only 20% of the reason. The other 80% was because that was when it nearly totally lost al their party support. Playstation basically built their platform on the failings of Nintendo. Hell, you can even say that the only reason PlayStation even exists today is thanks to how Nintendo treated sony.

In a manner of speaking, Playstation s the bastard step child of Nintendo.