Fanboys... ASSEMBLE!

[Weltall]

Ryan no matter how much you nitpick the numbers, the PSX unleashed a much larger number of games than the NES and on a much larger scale in a much larger industry (saying much, much to much). The third parties didn't have to kill each other during NES, it was like everyone had equal chance of success on the shelf but with PSX there were so many games so quickly, ramped costs, etc that companies resorted to cannibalism and pushed the market in to a deadzone.

You're ignoring a lot of the factors, here. It wasn't just that the PlayStation pushed out more games. That was an effect as much as it was a cause, and initially, it wasn't successful. The N64, with its library of approximately 6 games, was able to outsell the PlayStation for the first year, even with it having three or four times as many titles available at cheaper prices. The PSX simply didn't have a marquee game that could compete with Super Mario 64. It wasn't until Final Fantasy VII came out that the PlayStation truly had a flagship title. That game alone sold countless PSX units (mine included), and that's when the flood really began to make a difference. It became something of a poker game with Sony playing every hand and Nintendo holding out only for the biggest. Sony wore Nintendo down by nickle and diming and winning big hits like Resident Evil 2 and Metal Gear at a frequent enough pace that Nintendo's super hits like Ocarina of Time could not, by itself, propel the N64 beyond the PlayStation. The PSXs success fed off of itself, and before long, it wasn't even really much of a contest anymore.

Sony won the battle against N64 as much for Nintendo's mistakes as its own successes. The N64 was a console whose games were more expensive, and relied almost entirely on about a half-dozen terrific games to sell the machines. It didn't work. It was a strategy that essentially hinged on Nintendo trying to sell the N64 on the strength of a few games and a marquee brand name, hoping that Sony would devour itself trying to keep pace.