I've rarely actually heard developers say it precisely like that. The point most of them are trying to make, is that on Nintendo's system, you're fighting against the world's biggest and - arguably - best developer. Not only that, but the customers have an extra bias in favour of Nintendo.
Releasing a game on a Nintendo machine puts you up against the hardest competition you could possibly face. Releasing it on other systems doesn't.
And, for the consumers, this is a bad thing, because it makes third parties more reluctant to release games on Nintendo's machines.
It's not something Nintendo can easily turn around, though, because it really just means that their consumers would rather play their games than third parties'.







