The proper question would be, do they even sell?

The real question would be if the only place you could get them was the Wii U, would they? And the answer is yes.

A part of your statement holds weight. With the track record of third party support nintendo is having right now, I think we can all agree that all that support or at least most of it would've went to Sega with its CD rom because of its higher memory capacity.

Maybe, but the games you talked about would still exist. ;)

That's all kinds of wrong. If the PS1 never existed, the Saturn would have kicked the N64's ass because just like the PS1, it would have brought all those third partys over thanks to the machine using a CD format. That, and Sega was way better at third party support and had a great relationship with alot of western developers. 

I would have loved to see what Sega COULD have been. 

Lets step out of fantasy land. Nintendo stuck with cartridge all the way up to N64, and then its weird mini disc on the Game Cube. Last time I check, Sega last two consoles use CD roms and if there was no PS1 then I'm pretty sure most of the third party support would go to Sega because of its larger memory capacity.

Where would we be? Hmmm...

First off, with the Playstation out of the picture, SEGAs Saturn and Dreamcast consoles would have sold alot better, preventing them from having to leave the hardware market.

Considering that the Xbox (in a different form than the final product, but still) was already a project Bill Gates wanted to create sometime since even the announcement of the Playstation, and this really gaining momentum after the adapted WindowsCE OS in the Dreamcast, I'd doubt we owe SONY really much for Microsofts console. So we'd still have 3 players in the market.

Videogame development from third parties wouldn't have changed by a single inch from how it went here in the real world, with one exeption: No Singstar clones. Until mid-2000' the main development focus of western development companies was still the PC (which doesn't change here), and japanese developers would have SEGA instead of SONY as a potential selling plattform. So, really no changes at all here. What could have changed is the distribution between the consoles: I'd doubt a current gen Nintendo console in that timeline would have to do without western third party support and the games would be more evenly distributed (although the Xbox still would take the cake in therms of third party support, owning to its PC ties).

As for first party titles, we'd miss Sonys first party titles of course, but probably also Segas Total War series on PC. On the other Hand Sega would have developed more games to sell their consoles, and considering how many IP lay dormant at Sega I'd say we are actually missing out many more games than they do.

One big, often overlooked change: No PSP/PSV means no real contestant to Nintendos handheld emporium. That is, unless Sega would reenter that market again after the Game Gear and the Nomad, something we simply don't know.

And finally: Without the Playstation, which was and still is THE selling engine of Sonys other products since the turn of the millienium, Sony would most probably have gone bankrupt by now.

Okay, but how does what we are talking about now show that Legend Of Dragoon, ect would never have existed? They would have, just on either Sega or Nintendo (or both).

Also going by your own statement "It would be pretty bad with just Mario and friends for all of eternity", you seem to imply Nintendo being the only company around. 

Hey, if somebody didn't make PS, we would have gotten it eventually. However, PS did revolutionize gaming in several ways. It streamlined disc based gaming, memory cards, and games that didn't HAVE to be E for everyone. But with all due respect, there would have been no such crisis. Everything would have been made on 64 like Final Fantasy VII and Dragon Quest VII were originally going to be on. But someone said they could do something better and that's what happened.