Back during the Yamauchi administration, Nintendo had 4 primary development studios, R&D1, R&D2, R&D3, and R&D4, later renamed EAD. Yamauchi encouraged the departments to compete to make the best games. during the Arcade and NES days, you saw each of the R&D departments make their own games. But with the rising popularity of Super Mario and The Legend of Zelda, the Shigeru Miyamoto-led R&D4 became Nintendo's new star studio, and in the SNES era, was renamed EAD. R&D1 had retreated to the Game Boy, and R&D2 & 3's output diminished to near non-existence. By the N64, EAD had gained far more power and influence over Nintendo than any other division of the company. R&D3 switched exclusively to hardware development and was renamed IRD. R&D1 spun off their hardware team into RED and went mostly radio silent until the GBA, and R&D2 became a porting house.

When the N64 lost Nintendo's grip on third party support, the now infamous Nintendo software droughts began to kick in, and the N64 spent months each year without a single release. It was largely up to EAD and Nintendo's new partner Rareware, to carry the N64. When Satoru Iwata took over as Nintendo president, it made little sense to continue the old R&D structure considering how bloated EAD had become, thus the old R&D departments were dismantled, EAD was re-tooled into multiple sub-departments, and a new division, SPD was created as a counterpart.

This leads me to the question, had Nintendo been over-relying on EAD during the SNES and Nintendo 64 eras? EAD is a legendary developer and made arguably some of the most important games of all time. But I felt other departments at Nintendo should've gotten better treatment. Instead, Nintendo let Miyamoto and his pals overpower the other talent at the company. In the case of the N64, can you imagine how much better and more consistent Nintendo's output would've been if the other R&D studios were given more staff and bigger budgets? R&D1 in particular, could've certainly held their own against EAD had they been given proper 3D knowledge. R&D2 could've done some interesting stuff as well, and R&D3 would've still made games. Instead of allowing their teams to experiment equally and actually compete with each-other, Nintendo instead just let EAD control all their software, and in a way, I felt Nintendo's output by the N64 era became too homogenized for its own good. If Nintendo had given their in-house developers more freedom during this time, we could've had a cooler, bolder, and more diverse Nintendo than the diet Disney we ended up getting.

With EAD no more, and Shinya Takahashi now the head of the newly merged EPD, I feel like we starting to see the return of the more diverse libraries from Nintendo's different teams. They have a lot of talent at their disposal and it'd be nice to see different kinds of games and aesthetics from them. 

You know, Yamaushi only wanted to release first party titles on the NES, before accepting third party developpers. So it wouldn't be much of a surprise.

The question would be, did the other 3 R&D were shunned or they didn't met the challenge? Because the way you put all 4 were free to develop and had incentive to compete against one another, but one was much better than the other 3 so they came first. What should Nintendo do in your opinion? squeeze EAD and send their best devs to the other R&Ds and spread them?

TBH i think the impact was more seen on Wii/WiiU and somewhat now.

The other two consoles and gamecube to a degree had decent 3rd party support, so you never noticed game droughts and reliance by Nintendo on their main studio.

If you only play Nintendo games I can see where you are coming from here.

Nintendo still has a mentality like this.

They see them selves as a software company that makes hardware to sell their own software. 3rd party is competition which isnt always good.
While Xbox & Playstation see themselves as a service company's that make hardware to sell their services, and beneift from others.

tbh nintendo rather not have too much competition from 3rd party on their platforms, which is why they always make their consoles based around their own needs & idea's. While xbox & playstation do their best to appease 3rd party developers, even seeking their advice when it comes to hardware design choices ect.

Lol, this is a case of a person knowing only a tiny fraction of history and thinking it is the whole part.  I'm sure Nintendo had this viewpoint at first, because this is the exact same way that Atari did things.  Atari saw third party companies as a problem, as competitors.  And the huge flood of low quality video games is one of the main reasons that there was a huge crash in video game sales

Then Nintendo came up with a brilliant idea, arguably the most brilliant idea in the entire history of video games.  They decided to turn these third party "competitors" into "allies".  They sold licenses to put games on their console.  After that, both the console maker and the third party companies wanted each other to succeed.  This also kept game quality up to prevent another crash.

When you take random facts out of context, a really good idea can seem like a bad idea.

Errr, are you serious? N64 and Gamecube droughts were so bad that there were months with literally NO new game releases. I’m not talking only bad games, but nothing at all being released. You could literally pay attention to every game released on the console because the release schedule was a literal trickle. Gamecube was even worse because most of the third party games it did get were vanilla factory churned multiplats like Madden and Tiger Woods button based golf. The release schedule was so bad that you fans were forced to pretend that Rogue Leader and Eternal Darkness weren’t shit games (I know, I was there, I’d pretend online like these games were fun, but deep inside I was crying of boredom and horrific game balance and bland design). Whenever a decent third party game did come along, like RE4, a better version was already on the horizon (in this case for PS2 and Wii).

If anything, droughts were completely the reason the N64 and following Gamecube failed. For every game released, it seemed the PS consoles got anywhere between 5 and 20: and they were getting all the fun ones. While the dream team games were good on the N64, there simply weren’t enough of them. By the Gamecube era even the dream team and decent second party releases were gone. The 2006-2007 year on the Wii was the first time since about 1996 (a full decade) that Nintendo had a solid year of releases.

i said Yamauchi, not Nintendo. There is a huge difference. And while you're accusing me to take things out of their context, you just did the opposite, extrapolation, which isn't better.

This isn't true at all. Nintendo has been significantly less hostile towards third parties in recent years, especially with the Switch, where they're actively trying to court them for games.

Basically, R&D4 produced the most successful titles, and thus won the favoritism of Yamauchi. As a result, he put more focus on the now renamed EAD division, rather than focusing on growing the other studios within the company. Yamauchi didn't give all the departments a fair chance, instead he just put all the eggs into the basket of the division that got his attention the most, which happened to be EAD. The other studios just couldn't compete with Miyamoto and his team, and thus were sadly treated as afterthoughts.