Nintendo makes its own box that plays its own games and a minor selection of third party games. Meanwhile the competitors boxes play pretty much all third party games as well as their own games.
Basically the only worth of buying Nintendo's box is to play their games. The home console crowd doesn't value Nintendo's games enough to pay that price of admission. If the choices are buy Nintendo's box and play their games or don't buy it and miss out. The overwhelming majority of console gamers would rather skip those games.
Nintendo has no response for this because the only valid response isn't something they're willing to do. There for Nintendo will continue on a path to home console irrelevancy as more and more gamers start to ignore them.
Historically Nintendo console sales have been in a free fall. The Wii was a fluke outside of it each Nintendo console sold worse than the previous one.