Every 3rd party that says it's dropping support is bad news in terms of Nintendo's perception, so I wouldn't take this lightly. I wouldn't put Acclaim on the same level as Midway, who has really earned a bad rep. Acclaim was one of the N64's biggest supporters, and lately Acclaim has been publishing some great titles like Burnout.
Third parties are not selling because there is not a significant amount of exclusive titles coming from them. The GC's appeal is exclusives, Nintendo's or otherwise. But with a shift toward multiplatform development that seems to be happening with nearly all western developers, the GC's biggest selling point is diminishing quickly in our market.
Nintendo's has been doing a good job of bringing back some of the Japanese support they lost, but if they want to continue to have some significance in the western market, they will have to extend that same kind of courtesy towards western developers other than Factor 5. While it has been argued that 3rd parties are doing bad because of quality, we also have to look at the other side of this coin. Why would it be worthwhile for a 3rd party to give us high quality ports and exclusives when the GC audience seems so fickle? Nintendo is going to have to make it worthwhile for western 3rd parties in the same that they are making it worthwhile for companies like Square and Namco.