The head start was only going to be a plus if they took advantage of it and they clearly didn't have the games or OS in suitable shape to do that. Also their insistence on going with proprietary, low-powered hardware I see as an unnecessary cost.
So i say later; with a hundred watt console (and whatever x86 hardware they could buy at the same price point), released with Super Mario 3D World, Mario Kart 8 and Windwaker, plus a few more 3rd party games, throw in a dash of good marketing and I think it could have been very competitive. A flash storage only option and an SKU with a built-in harddrive for those who find portables too confusing.
They would have had a console that would at least have been in the same ballpark as XB1 in terms of power, it wouldn't have looked like the Wii, thus avoiding brand-confusion and would have made an easier target for third parties. I don't think Nintendo is every going to be the third parties friend but if ports are easy then they should at least get the obvious candidates.