According to recent rumors in Japan, after releasing its currently announced titles, Namco will not release any more software on the PlayStation. Sources state that Namco has reached a limit with the current PlayStation technology and has begun work on the PlayStation 2 prototype 1 system. Since the PS2 won't be released anytime soon, they will turn to the Nintendo 64 system as a stopgap move. Dreamcast development was ruled out due to the lack of research time with the dev kits, but apparently Namco programmers have enough familiarity with the N64 so that they can have software finished rather quickly.
It seems highly unlikely that developing games for the N64 will make Namco any more money than if it continued PS support, but the rumors persist. The other part of the equation is the close relationship between SCEI and Namco. It is conceivable that Sony would make such a concession to help Namco to maintain its bottom line in order to ensure unrivaled launch titles for the PS2. Sony could also reason that a few Namco titles will not be able to save the N64 from its continuing slide.
Either way, you heard it here first.