Frankly, to get Nintendo to stay in the living room past the Gamecube, they should have not made the boneheaded descision to stick to cartridges for the Nintendo64. The original analog control stick was a groundbreaker at the time, and the graphics were second-to-none, but without a large enough medium or RAM capacity, the result was either rediculously short draw-in, textures unworthy of the hardware, or pathetically short games. Forcing the sound to run off the CPU didn't help matters, either.
I mean, compare Legend of Zelda, Ocarina of Time to King's Field III or Ico, or Excitebike 64 to either Gran Turismo title.
Of course, I suppose that it would have been tough to have had to compete with the Sega Moebius, with its shader-model GPU by Adapteva and its implementation of the Traveler handheld system (with its three analog sticks and touch screen) as the system's controller, wouldn't it have?