That would be true if it were still 1999, but there's a lot more to it. Part of the problem is that Sony and Microsoft aren't chasing exclusive titles so much as opening up their platforms to any and every enterprising studio. Third-party developers can compete fairly on those platforms, so they invest more into making a great game. On the other hand, Nintendo has set a terrible precedent of hindrance, anti-competitiveness, and above all else, risk. And they've done very little to mitigate that risk or help studios to shine on their platform.
Past precedent is a big factor. Nintendo has had a smaller than average install base on many of their recent consoles. With the rise of PC gaming, mobile gaming, and the bustling indie scene, the console market as a whole has taken a considerable hit besides. Factor in years of subpar ports on Nintendo systems, oodles of shovelware, and a pervasive belief that Nintendo's hardware simply can't compete. What you get is a total lack of faith for any developer, that their product will be a slam-dunk if released on Nintendo's platform.
And even if you're fully prepared to take the plunge, Nintendo has a history of turning away lucrative opportunities to secure acclaimed games because they clash with the company's own image. Take "The Binding of Isaac" for instance. Nintendo made waves in the gaming community for turning away Edmund McMillen, who had just released "Super Meat Boy" to critical acclaim, when he wanted to make a definitive port of his new title for 3DS. Nintendo's propensity to pick and choose what it will and won't allow-- with no transparent criteria-- is a clear deterrent for studios who want to develop for an older audience. In fact, Nintendo's hardline stance on mature content, an artifact from the controversies of the early 90s, has only just started to thin; perhaps because they published Bayonetta 2 themselves. .
On the other hand, Nintendo makes software that sells their hardware. This is the core reason why Nintendo consoles often have last-gen specs and a lower price-point. Their market is comprised in part by people who are unlikely to ever touch a third-party game: The die-hard Nintendo fans who chose to be early adopters, followed by people who weigh their money against the singular draw of a favorite franchise like Pokemon or Zelda. Either way, it's best to keep it cheap so as to make those purchases easy to stomach. But neither party comes to the table expecting a rich and diverse library of games. Their money is already hallmarked for specific purchases before the console is ever in their hands.
Nintendo's "evergreen" price scheme for first-party games means that they've padded the odds heavily in their favor when it comes to selling new software. If a customer walks into a store to buy a new game at full price, it's going to be a Nintendo title. They know that "AAA Blockbuster 2015" will fall heavily in price as the pool of people yet to play it rapidly shrinks, whereas Mario Kart will likely never see a true price drop during the system's lifetime. In that regard, Nintendo is fiercely anti-competitive when it comes to their platform.
In addition, the cost of development can be much greater. Nintendo didn't make multi-platform support any easier until very recently, so building on Nintendo's own web framework meant much more work to reach a fraction of the community at large. Other platforms usually share common game engines, so it's cost effective to build for them and reach a majority of consumers. Nintendo has just recently made good on their pledge to support Unity Engine on Wii U, but outside of indie studios, their mainstream licensees are still stuck cobbling together clunky ports.
And then there's the "gimmick" aspect of Nintendo's hardware. It's difficult for outside studios to take full advantage of motion control, multiple screens, 3D, half a dozen available controllers with different layouts, and all of the other features that Nintendo builds games around. It's expensive, complicated, and at the end of the day Nintendo will always do it better. The novelty is gone, so falling short of perfection in this regard is tantamount to failure. And those developers who eschew gimmicks and release with conventional controls always get flak for it. It's almost a no-win situation.
The size of the existing user base is just one aspect of a larger problem. Nintendo's chain of command always ends in NCL, regardless of what region you're looking at. Nintendo Co, Ltd is insular, fickle, highly resistant to change, and above all else, shrewd. I really don't think Nintendo wants to open itself up to software competition. If you look at their business practices as a whole, they tend to target studios that they can conglomerate and benefit from directly. Because they've so seldom offered the hand of friendship and courted partners, their reputation in the industry undoubtedly suffered. It's more likely that studios regard Nintendo as strictly competition, and a little bit of accommodation could go a long way in changing that.
But I don't think they're going to change a thing. In some regard, Nintendo as a corporate entity knows that Sony and Microsoft are rapidly approaching the point at which they can no longer compete with PC directly. And at that point, profitability goes out the window. Nintendo is insular to a fault, but there's something to be said for its ambitions. If Nintendo could find the right balance between offering a singular experience and a modern one, I see no reason why they couldn't have another resurgence. They came back with the Wii, the 3DS's longevity continues to grow, and their Quality of Life project has buzz.