Sources fut coins 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.