They are probably referring to Nintendo trying to force cardridges on anyone who wanted to develop for the N64, which was quite limiting for a lot of developer. For instance, FF7 was originally considered for it, but Square decided to go with PS because their CDs were a lot better and had more memory iirc, so it was better suited for it.

This played a pretty big part in pushing a lot of 3rd parties over to Sony, and Nintendo never really got to enjoy the same level of 3rd party support as them for several years. I think the Wii was the first time in a long time where it sort of got some decent support, and the Switch is when many third parties is back to also providing some support for them.