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By "peaked higher", do we mean over a certain time span or the highest crowning achievement from either of them?

Highest peak moment from either company? Retro with Metroid Prime on the Gamecube, by a decent margin.

But at their peak as a company, then Rare for sure. Their N64 output was arguably as predominant as Nintendo's games. Retro can't hold a candle to that many fantastic games with that much variety in a single generation.