The poor performance of the N64 and Gamecube after launch was primarily caused by Nintendo's inability to sell consoles in Japan and attract exclusive support from Japaneese developers. The main reason the N64 didn't take off in Japan was that companies like Namco, Bandai, Square, Enix, Capcom, and Konami all decided to focus support on the Playstation based on the hubris of Yamauchi; people who blame cartridges for the N64's failings have a very poor understanding on why developers abandoned Nintendo.
Iwata (since taking control of Nintendo in 2002) has spent the past several years mending fences with publishers around the world and has focused on ensuring that subsidiaries of Nintendo are run by people who know what they're doing (Reggie). As a result of Iwata's efforts every major publisher released games for the Gamecube.
Iwata is very unique across the entire gaming industry as he is the only former game developer who is in charge of a large videogame publisher; if you look at other publishers they tend to be run by laywers or marketing drones who often are from the Movie and Music industries. His unique perspective is the reason why Nintendo is moving in a different direction than everyone else, and is probably the reason they have been so successful.