Many people are speculating that Nintendo is heading down the same path as the Sega and will stop producing consoles and start to licenses their big name titles to other companies. Why are all these people suddenly saying that Nintendo is on the decline? Because the 3DS sells aren't what Nintendo was projecting. We all know that the 3DS hasn't sold as well as the DS family and the Wii right out of the gate but I will give you three reasons why I believe this has happened.
#1. Release date: Releasing a next-gen handheld console at the end of March wasn't the greatest of idea that Nintendo has had. A March release isn't going to attract a casual gamer as much as a holiday release would have and we all know that the casual gamer played a HUGE role in Nintendo's Wii/DS success. I would expect sells of the 3DS to increase significantly around Christmas.
#2. Lack of games: The 3DS is a great handheld, but to be perfectly honest, I haven't been playing it that much. When I first got the 3DS, all I got was Street Fighter IV 3D, I played Street Fighter for about a week and didn't really play with the 3DS again until Ocarina of Time 3D came out. Now don't get me wrong, I love the 3DS, I think it is a great addition to Nintendo's system lineup, but I just don't have any games to play on it. The lack of games really hurt Nintendo's appeal to their core gamer market and I think once we get a few Nintendo and GOOD third party titles, we will see sales increase.
#3. First generation: There are a lot of gamers out there who will not buy the first generation of a console and for good reason, every second generation of any console has been far superior to it's predecessor.
I think that it's a little too early to be saying that Nintendo is heading down the Sega path, but I do agree that Nintendo needs to step it up to keep their core fans interested because ultimately we are their bread and butter, the casual gamer is going to go to whichever console has the next great gimmick. Nintendo needs to improve on releasing more core games, DLC needs to be something that Nintendo further expands upon and online play with Nintendo needs to move past the Friend Code era. Nintendo is a video game Juggernaut and I don't think it will be going anywhere, any time soon.