There was no reason for Nintendo to stick with a cartridge based format as late as they did, nor did they have to create a custom disc format for the Gamecube. Those decisions limited the interest of third party developers who didn't like the idea of having to deal with Nintendo controlling replication and licensing. A publisher which released a game on the N64 which didn't sell well was stuck not only with the development costs, but also a stock of unsold cartridges which cost between $10 and $20 each to replicate and package. A publisher with a poorly selling disc based game might still have to deal with the loss in development costs, but their replication and packaging costs would be a fraction of those for a cartridge and theoretically, they could still make a little money even if the game was sold at $20 retail.
Those bad design decisions and attempts to control third party publishers are still haunting the Wii as a new generation of low-end third party developers either release total junk for the system or limit A-list releases figuring that they won't appeal to Nintendo's core audience. I'm glad Sega is finally getting into releasing some games that will appeal to older gamers, but I can only imagine what kinds of genre pushing titles we could be seeing if Nintendo didn't keep the door closed for so long.