There is room for 3 consoles and there being 2 other options is the least of Nintendo's problems. Wii U has several challenges, but they are challenges in terms of its own design, not that there are multiple alternatives. One alternative - PS4 - is enough to sway buyers away unless Wii U presents a good option in and of itself.
The one that is actually suffering the most right now is XBOne, just because the content is too similar to PS4 while being more expensive and/or weaker technically. One needs to do more to prove it's not a redundant product.
Wii U is not a redundant product, it's just one that a lot of people didn't seem to want. Some recent releases have helped and future one may too. Combined with a price cut the product may find a place. But two alternatives is only a very minor issue. If there was only PS4 Wii U would have a similar if not greater challenge.
