Uh....
I think using full-gen hardware sales is the best metric to compare against. Unless you can suggest an alternative metric or way to measure defections/upgrades/closet stuffers, I will just compare the only way that I think is fair and consistent across generations.
There's little argument the Wii expanded the market and now those consumers have left the space, so that would be a contraction and that to me is very worrisome. Even if you suppose the hardcore are growing at a steady rate (compared to the explosive Wii-led casual growth last gen) and are a reliable group that will always show up, there's still going to be a very large hole that studios will have to be aware of.
Now I would suppose many of the AAA studios will probably be unaffected-- or perhaps more affected by the increased budget more than the decrease in potential consumers-- but there was a ton of software moved on Wii last gen and we'll see even further contraction in the sub-AAA space. That's really upsetting to me.
I do think it falls on Nintendo's head, yeah, but everyone will feel it.