Strengthening competition is exactly what I was referring to, along with Nintendo's platforms becoming less appealing as third party support gradually declined to the point it's at now. I figured that much was obvious. Thus, "losing fans" to other, more appealing platforms (or quitting gaming altogether).
Their competition is the strongest it's ever been and Nintendo, despite coming off a highly successful console, still manages to find themselves in a precarious position where we're talking about how much they're going to surpass the Gamecube by. I think that says a lot about the way the company is run, but that's for another topic.
Regarding the growth of the Nintendo fanbase willing to return for the first party franchises, we'll just have to agree to disagree I guess. The best case scenario I can imagine is them making up for the lack of third party games, not a lot more than that. As I said in a previous post, if they can work out partnerships for interesting and appealing exclusives to keep their library padded out and the release schedule reasonably full, that could allow for them to be at least somewhat successful even if the WiiU is a gamer's "secondary console."
The problem is that doesn't do anything for them in the long term, which is what this thread is about as far as I understand it.