First, let me make something clear. I love the GameCube, I think it's one of the most underrated systems ever, and had some of my favorite games of all time on it. That being said, I can't ignore the problems Nintendo had with it. Sure we can talk about the mini-DVD format, and lack of online, and purple color, and while the decisions Nintendo made in regards to those weren't helping, I think Nintendo had another problem on their hands.
Throughout much of it's life, Nintendo of America constantly tried to portray the GameCube as this "cool", "hip", "edgy" system for young adults. Not only in advertising examples A(https://youtu.be/kIgpuGw168k), B(https://youtu.be/sNmCgOOqh80), and C(https://youtu.be/3C-IRfw5LJ8). But also in the direction Nintendo took some of their franchises, and the games they got onto it. To give a few examples...
* Super Mario Sunshine had fully voiced cutscenes, and a more in-depth story than Super Mario 64, giving the game a bit more of a cinamatic feel.
* Eternal Darkness, an innovative Survival Horror game, marked the very first Mature rated game published and co-produced by Nintendo (Perfect Dark and Conker's Bad Fur Day were both self-published by Rare, Nintendo just distributed them).
* 1080 Avalanche featured almost entirely licensed rock music from artists like Finger Eleven.
* Nintendo constantly tried pushing Sports, Wrestling, and Mature action titles in a lot of their marketing.
* Twilight Princess being darker and more realistic was a response to the contraversial Art Style of Wind Waker
* Nintendo's ill-fated publishing deal with Capcom, The Capcom 5, included exclusive access to the Resident Evil franchise.
While all of these were great games, it all gave the impression that Nintendo was trying to be "hip with da youths" so-to-speak. It felt like Nintendo was trying to mimick Sony's strategy, and philosophy with the original PlayStation, but didn't understand why it worked, and were about 6 years too late. Don't get me wrong, Sunshine, Metroid Prime, and Resident Evil are great games, but the pervasive feeling was that of "look, look, were cool and edgy too!", and came off as a desperate attempt to be relevant with more hardcore gamers. It also contradicts with Nintendo's philosophies as a company. To put it in perspective, when the tone of your console's design and some of it's software, clashes heavily with the tone and audience of how you're marketing it, you have a problem.
It just felt like Nintendo wasn't playing to it's strengths as a company, and was just trying to cash-in on the "edgy hipster" gaming fad of the early-mid 2000s. Like I said, the GameCube was a great system, but if I had to sum up Nintendo's biggest problem in that generation, "How do you do, fellow kids?" is probably the first that comes to mind.
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