Wasn't it Shigeru Miyamoto's insistence on cartridges on the Nintendo 64 that drove the third party publishers away? Once SONY came into the picture, that brief Nintendo exodus created a new userbase away from Nintendo. Things have never been the same since.
I thought that was more of a Nintendo thing since they hate to pay licence fees for any kind of tech they use. Still to this day Nintendo consoles don't play DVD or Blu-Ray movies.