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Even if Nintendo fixed a lot of errors with the GameCube, this was still a massive problem:

Sony was already at 30 million by March 2002 as the GameCube was just taking its baby steps. Even if the GameCube was a red hot seller lets say and they shipped 5.5 million instead of 4 million out of the gate, they were so far behind. 

They had to launch GameCube in fall 2000, they could not afford to give Sony a 18 month head start. In fall 2000 you'd have to move Zelda: Majora's Mask and Perfect Dark and Conker over ... but I think I would have done that. Those games were kind of wasted on the N64's final year year.