Was Nintendo right to opt out of the graphics arms race?

[Pemalite]

Soundwave said:

Pemalite said:

Gamecube, Playstation 2, Original Xbox did not support MPEG-4 video decoding natively in hardware.
MPEG-1/MPEG-2 is the standard.

Xbox 360, Playstation 3 had hardware MPEG-4 support in their video decoders. (Wii missed out.)

All these consoles could do it in software however... With caveats. - But that would compromise other parts of running a 3D game.

So no... It's not as simple as "Lets use MPEG-4".

GameCube did support DiVX which is basically a MPEG-4 variant, Rogue Squadron III used it for its FMV so did other GameCube games. 

Again. It didn't support it in hardware. That is all done in software.
No point even trying to argue with me on this point with my low-level understanding of the hardware.