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Leynos said:

Nintendo was in no danger of going bankrupt with Gamecube. Also while Gamecube had the worst 3rd party support it's 1st party was mighty strong as usual with Nintendo consoles.

Because the hardware was very well designed and cost efficient. If they did what MS was doing and losing like $150-$200 per console, sure they would have gone bankrupt because that was an ass-backwards way of running a game division (MS hasn't really gotten much smarter since then which explains why they are now on their way out have accomplished a whole lot of nothing). It's not really surprising now looking back on that time that they decided they couldn't just keep sticking with trying to be in a pissing match with MS/Sony of that time. Today things are a bit different. 

The 1st party support of the GameCube was actually a big problem, it wasn't good enough. Mario Sunshine/Wind Waker/Metroid Prime/Smash/MK Double Dash were a big step down sales wise from Mario 64/Zelda: OoT/GoldenEye 007/Mario Kart 64/Smash 64. Smash Melee is really the only Nintendo IP that saw a growth in sales. They just weren't on their game that gen. They needed what Mario Galaxy was instead of Sunshine and they needed Zelda: Twilight Princess, not Wind Waker, and even with that they'd be hurting with no GoldenEye 007 equivalent.