The storage medium dramatically damaged their ability to compete.

In the N64-PSX era, the N64 was the most powerful console but because cartridges held less the CDs, it required expensive cartridges to match the cheap CDs. Developers were getting used to with the PSX due to the fact that thanks to the advent of FMVs, more developers wanted the space for those and new more massive game features that weren't available before. This combined with bad 3rd party relations in the previous generations aided in the PSX victory despite the fact that the N64 at least in the western world was still very much a competitor thanks to Nintendo's software and its abundance of multilayer party games.

In the GC-PS2-XBOX era, once again Nintendo chose a different medium then its competitors with a propriety disc that while making the software more secure from piracy was smaller then the DVDs its competitors had as standard. To compound on this failing was Nintendo's decision to release the system with the initial case coloring of Purple and its normal control emphasis on the A button. The controller was meant as a way of simplifying gaming which Miyamoto and others at Nintendo thought might be going too complicated and the coloring of the casing was who knows fault. But these decisions allowed others to cement the idea that Nintendo and its console was meant for younger family oriented gaming which combined with the storage medium drove most 3rd party support from the system as it required extra costs compared to porting a PS2 game over to Xbox (2 compressed GC discs equally one PS2 or Xbox disc). Developers that received success during the N64 era sticking with Nintendo began to desert and it was looking very much like Nintendo outside of its own stable and portables would go the way of Sega


Technically their is little doubt that both the DS and Wii were incredibly lucky gambles that Nintendo struck big on and we all know how the casual market they had been trying to simplify gaming during the previous generation for finally aided them. Now with the Wii U they are prepping for another different type of gamble, time will tell how successful it is.

I say it has to do with the rise of the ''Hardcore gamer''. Gameplay (which is Nintendos best quality) took a back seat.

Actually, yes, they were forced.    The deal with Sony would have ended them as a hardware maker and the deal with Philips never was finalized.  By the time, they had no other CD manufacturer they could strike up a deal with in time to launch the console.  They were already a year behind schedule.  

I'm not trying to make them a victim.  I'm explaining why things happend the way they did that lea to other things happening. 

I'm sorry if you don't like it but it's the truth.

It's true that Yamauchi was, um, eccentric ("PlayStation gamers only want to play games alone in their rooms!"), but the cart thing was a huge, huge problem. The cost was just ridiculous.

In addition to that, you couldn't get a new batch of games to market quickly if you actually had a hit because it would take a month-and-a-half to get them on shelves, whereas the lead time was weeks on PlayStation. Nintendo also had a policy that all carts must be paid for upfront which, while a sound decision for Nintendo, didn't endear them to third parties who could get better terms with Sony, in addition to a much lower cost of goods.

Really, if they had just paired the damn thing with a CD drive*, it would have changed their fortunes before it even launched. The games, thanks to the extra storage space for textures, would have looked night and day better than PS1 games. Alas!

*To be fair, the N64 chipset was cutting edge at the time, so it might have been cost-prohibitive to pack in a CD-ROM, but with hindsight, it looks like it was a huge blunder.

Show me some proof or it didnt happen, because Sony and Philips are the ONLY disc makers in the world? Why not just make discs?? What was stopping them form doing that? Didnt they do something similar with GC? Hell who made the discs for the 64DD? Because from the quotes i read from them, even going into GC era they were saying how good cartridges were.

I think Nintendo's biggest mistake actually dates back to the NES. I think that monopoly they created by telling 3rd parties what they they were and weren't allowed to do had a big impact on their relationships, and I think they never want to see that happen again.

Only reason they were there for the SNES too is because it was far too large of a market to ignore, but even then you saw support for competing platforms grow dramatically.

I'll show you the proof later. 

As for 64DD and GC, Matsushita provided the disc drive and discs.  In fact, Matshushita has provided the disc drive and discs for every single disc based Nintendo console.  You can't just "make discs".   You need a disc drive and the software to connect between the drive and your hardware.  As well as the software to write the games to the disc. 

And no, Sony and Philips were not the only drive developers out there.  JVC was another option but by the time things feel apart from Sony and then Philips, it was way beyond schedule.  

People always forget that Nintendo had GBA keeping fans happy while GameCube was disgracing the company. Wii was really the first home console since SNES that really felt like a proper home console.

What do you mean by that?

i can provide you some proof right now. 

Yamauchi admitted at the 2001 Nintendo Space World event that he had intentionally ordered the Nintendo 64 to be difficult to program games for. The idea was to repel untalented third-party developers from the console, and hence tighten the quality of third-party games. However, his plan backfired and merely increased the number of poorly developed games for the console. As a result of this, the Nintendo Gamecube was to take a step in the other direction, and provide an easy, smooth and intuitive programming environment for game developers.

Grandted this might not have anything to do with the discs perse but you can see where the mindset was at at that time.

Why not use Matsushita in the FIRST place? Time couldnt have been a factor with them and even if it was, they could have chose to just release later. My point is they werent "forced" to do anything.