What if Nintendo and Sega didn't make the mistakes they made in the 5th Generation?

Let's say, Nintendo made the Nintendo 64 a CD-Based system, and the Saturn was 3D focused, and launched on time like Sega was supposed to, what do you think would've happened with the PlayStation, and what would Nintendo and Sega be like today? IMO, even if Nintendo and Sega didn't make poor hardware decisions regarding the Nintendo 64 and Sega Saturn, the PlayStation still would've dominated, and here's why.

The PlayStation, for better or worse, kick-started the Hollywoodization of Video Games, and made the medium much cooler to the mainstream rather than just a form of novel amusement like a board game or a kids toy. It's entire creative ethos and philosophy was radically different from Nintendo and Sega's. Sony helped shift the market away from simple, arcade style games, and more towards more marketable, cinematic fare. Meanwhile, Nintendo and Sega were still clinging to the game design mentalities they held onto in the 2D era, which ultimately made them look less desirable.

On top of that though, Sony completely tore up the home console rule book, and presented a completely new concept to the industry. Up until that point, Nintendo and Sega had largely relied on their own software to sell systems, whether it be Nintendo's award winning franchises, or Sega's deluge of Arcade ports. 3rd party developers can join if they wanted, but they weren't going to push them as hard as thier own titles. Their systems were designed for their games, first and foremost. Sony came in and presented a completely different approach, they were designing the PlayStation based on the input of all the major developers, who were already fed up with Nintendo's draconian control and Sega's lackadaisical incompetence. They told 3rd parties "hey if you make games for us, then not only will we help you make your games, but we will also help spend millions of dollars in advertising and marketing to get your games out there, and our royalty fees are cheap, everyone is welcome". This resonated well with many developers, who were already fed up with the alternatives. Now all of a sudden here comes a company that isn't gong to jerk them around and crack whips on them (Nintendo) or give them shoddy, over-designed, and broken hardware and told them to deal with it, or bombard them with useless add-ons not even they supported (Sega). This was a company that would actually work with them, and make them feel like the main driving force, rather than just being cheerleaders like they used to.

So in the end, had Sega and Nintendo not been screwing up as badly, Sony still would've won, because their then unconventional approach to hardware development proved to be more effective.

As for the future of Nintendo and Sega, well they would've put up a much better fight, but then Microsoft would come on to the scene and made them irrelevant. Nintendo and Sega likely would've deviated from competing with Sony and Microsoft, and fight a secondary console war.

Yeah i think Sony would still have an edge due to its name, money, and it having the music player gimmick.

You can't predict how well a system will do. The Dreamcast was awesome and had loads of great games on release. The Vita is well desgined the perfect handheld apart from its memory card prices. It failed to a 3DS that released a second analog attachment, a 3DS XL for a bigger screen and then a NEW 3DS which is still less powerful than a Vita. Sony just gave up with the Vita while Nintnedo kept fighting. Then you have the Wii who most gamers thought was a joke and would just fail yet became one of the best selling systems.

You can't predict these things.

Arguably the biggest reason for Sony's victory over Sega (and later, Nintendo) was this:

Sony learnt their lessons from Beta Max vs VHS wars and was buying multiple game studios in the early 1990s which sets the stage for PS1.