Not insignificantly, though, Sega dropped the ball on their (already limited selection of) first-party software before they dropped out of the hardware business

Not insignificantly, though, Sega dropped the ball on their (already limited selection of) first-party software before they dropped out of the hardware business. Nintendo has multiple franchises that are all at least as strong as Sonic was in the Genesis days. Nintendo's console sales have always been held up by first party franchises - they burned bridges with 3rd parties long ago by charging extortionate license fees on the SNES. It'll be interesting to see how far they need to go to tip the scales against them.