It's a combination of things, like u said it was expected to be down this year, just not as much. Lack of big hitters in the first half of the year, summer drought, long overdue price cut have made the drop from last year bigger than it should have been.
Nintendo has spent up the majority of their big system sellers so they had to resort to their lesser ip such as Kirby, Yoshi, Tomodachi.
Also the delay of Smash Bros caused a drought in the summer. There was nothing significant between the release of Tomodachi in June and Smash Bros in Oct. Had Smash Bros been an August release then perhaps the summer baseline would have been better.
August marked the 3 year anniversary of the original 3DS price cut and 2 years since the launch of 3DS XL. Both sku were overdue for a price drop. 2DS-$99, 3DS-$129, XL-$149. Price cut+Smash Bros in August could have helped alot.
Ultimately Nintendo is struggling to support 2 sseperate devices at once causing droughts and after taking losses for the last 3 years, Nintendo is choosing profits over install base so price cut is out of the question.
When the herd loses its way, the shepard must kill the bull that leads them astray.
