i won't say that i have all the facts, but the FF defection from nintendo might have been due to nintendo's bullish ways about doing what was financially best for them - developers having to pay royalties to use nintendo's cartridge system. also, how many cartridges would have had to be used for ff7? it might have just made more sense to do it on cd. this might have turned a lot of developers minds without sony throwing money at them.
albeit sony has been grandstanding much the same way that nintendo was when they were the winners every console generation. they've already humbled themselves a bit after their horrible first year... but sony still has to present themselves like a winner or else no one's going to believe in them.