Mario 64 was a genre defining title, there was nothing else like it out there at release, and it took years for the competition to catch up, Mario Sunshine on the other hand was irrelevant pretty much immediately on release, with games like Ratchet and Clank making it look like the work of amateurs.
Effectively the Gamecube in general heralded the first time where Nintendo's 1st party titles collectively played second fiddle to 3rd party games, as opposed to influencing the industry. 3rd party companies effectively out Nintendo'd Nintendo with games like Ratchet and Clank, Okami, and Shadow of the Colossus, whilst Nintendo were simply going through the motions and making marginal improvements.
Mario Sunshine was a perfectly fine game, but people expected better.
Domino_slayer
I never played any Ratchet and Clank (or Jak & Daxter for that matter) games so I can't comment how the game compared to them but I believe it certainly wasn't irrelevant or amateurish. It was a very good platfromer that just didn't quite live up to SM64 and people's expecations.
I also disagree that 3rd parties outdid Nintendo in the GC era. I think Wind Waker was an excelent game and I'd personally place Okami bellow it. Besides, games like F-Zero GX (co-developed by Sega) and Metroid Prime had basically no competition. It's also debatable if SotC is really better than TP. The only thing where 3rd parties had a possible edge was a feeling of freshness (because Nintendo always bets on the "holy trinity" of Mario, Zelda and Metroid).
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