Prior to the release of the PlayStation, it's fair to say that Nintendo was the biggest player in the global video game industry. It had already conquered much of the world with its NES, and the SNES – despite stiff competition from Sega – had established itself as one of the most popular consoles of the period (which is why the Switch overtaking it in lifetime sales is such huge news).
However, they say pride comes before a fall, and Nintendo's apparent arrogance led to newcomer Sony sweeping in and stealing away its audience. Nintendo's decision to stick with expensive cartridges at a time when the industry was moving towards cheaper (and roomier) CDs cost it the support of third-parties like Square, which famously took the Final Fantasy series to the PlayStation, starting with the acclaimed Final Fantasy VII.
A lack of publisher support is just one of the reasons the N64 struggled in the face of the PlayStation, despite playing host to some of the best games of the generation in the form of Super Mario 64, Zelda: Ocarina of Time and GoldenEye 007. However, somewhat predictably, Nintendo's president of the time Hiroshi Yamauchi had a somewhat different opinion on why the console was bested by Sony's system. He was quoted at the time as saying the real reason the N64 failed is because Japanese gamers "[like] to be alone in their rooms and play depressing games."
Famously short-tempered and never one to mince his words, Yamauchi uttered that pearl of a soundbite around the same time he announced he would be retiring as president of Nintendo, a position he had occupied since 1949. He passed away in 2013, and it was only while we were flicking through a pile of old Gamers' Republic magazines from the dawn of the millennium that we were reminded of Yamauchi's amusingly negative assessment of the Japanese games industry.