The N64 was the last contender of its generation and, while being the most technologically advanced in several respects, it also showed some serious hardware flaws and old-fashioned design choices that hampered its chances of competing against the revolutionary, and now dominant, PlayStation. First and foremost, the system was still cartridge-based. Nintendo, unlike its competitors, refused to adopt the new CD-ROM medium. While this allowed much stricter and effective control over its
software and also helped in limiting possible piracy, it offered only 64 MB available to developers and at a much higher production cost. CD-ROMs were much cheaper and offered over 600 MB to include more assets, full motion videos, music, etc.,
The Nintendo 64, the last home cartridge-based system, launched in 1996 for $199 along with two titles:
Super Mario 64 and Pilotwings 64.
giving the impression to the casual player that N64 games were necessarily inferior due to size limitations.
Unfortunately, this impression was indirectly confirmed by another unlucky design choice. To keep costs down, Nintendo opted for a 4 MB unified memory architecture, meaning that the N64 had no fast, dedicated video RAM. To make things even worse, the cache memory available for textures was limited to only 4 KB. All of this resulted in generally slow performance due to the RAM high access latency and forced programmers to stretch small textures to cover large areas, often resulting in simple and blurred backgrounds. Despite these issues, developers’ ingenuity still allowed for the making of fantastic games. Super Mario 64 sold more than 11 million units and even excellent first-person shooter (FPS) titles like GoldenEye 007 were released with critical acclaim.
Released in 1997, GoldenEye 007 by Rare (at that time known as Rareware) was considered by many to be the best FPS game of its generation.
However, many developers still preferred to join forces with Sony, with the final result that only 387 games were released for the N64 while around 1,100 games were published for the rival PlayStation. With fewer games in its catalogue, Nintendo saw its user base shrink to 32.93 million as the N64 sold only 5.54 million units in Japan, 20.63 million in the Americas, and 6.75 million in other regions.
Towards the end of 1998, Sega was finally ready to challenge the competition
properly and, after the previous missteps, this new system had to be successful or the historically strong Sega would be in real trouble. Interestingly, to get the best possible product, the company decided to pit two internal teams against each other and develop a prototype in parallel and independently. The new console, to be named Dreamcast, would be developed out of the better of the two prototypes. Both teams used a Hitachi SH-4 RISC CPU clocked at 200 MHz, but one team opted for a Videologic PowerVR2 graphics processor while the other chose hardware by 3dfx,
which was the leading PC graphic card manufacturer at the time. At first, the latter encountered more favorable feedback but, due to an in-principle agreement between Sega and 3dfx that was completely disclosed during 3dfx’s own initial public offering, it was ultimately decided to opt for the former. As a consequence, 3dfx’s value as a company was shattered27 and the Dreamcast was left with what was probably an inferior design.