One thing I've learned over the years: The American historical point of view isn't always the same as the world's point of view. People who actually experienced a thing have a very different memory of "How things went down" compared to those who learned about it after the fact. And we all have our own personal opinions and biases.
With that said, I'll tell mine.
I was 18 when the PS1 launched and, at that time, I was a die-hard Nintendo fan. Still, I read every bit of gaming info I could get my hands on and watched every show from GamePro TV to Electric Playground to Nick Arcade. The Sega brand was pretty much already defeated along with NEC and Atari. Other major names tried and failed to enter the market and, from my POV, Sony was just another one of those. My cousin and I actually rented a PS1 a couple of times, playing NFL Gameday and Rayman (I hated sports games, btw) and I wasn't impressed. Nintendo's "Ultra 64" content that they showed in arcades looked leagues better.
Nintendo had fully convinced us that the N64 was worth the wait. And when it launched, that was totally true. Games like Mario 64 and Wave Race were beyond anything we could have imagined...but by January 1997, things had changed.
N64 had software droughts like you wouldn't believe. A friend of mine let me play Tekken 2 and Street Fighter Alpha and suddenly, I A NEEDED a PS1. By the end of that year, I didn't even own an N64.
So what caused that? Software droughts? Lack of cgi videos and games that had almost no voice acting and terrible limited soundtracks ( Shadow of the Empire only had like 15 second music loops)?
That's what caused it for me, at least.
And what caused all of those issues? A lot of factors but, as I said a couple of times, Capcom, Konami, Namco, etc. ALL still made games for the N64. They just didn't make the "big games" because those games didn't fit on a cartridge. As the Xbox 360 showed, NOBODY is loyal.
A CD storage media would have made a HUGE difference.
