At the end of the day, Nintendo competes equally with the likes of MS's Xbox and Sony's Playstation. Why? Because they all at a base level compete for a consumers playtime.
As Reggie Fils-Aime said: "we compete for entertainment time".
"Every day I look in the mirror and ask myself: "If today were the last day of my life, would I want to do what I am about to do today?". If the answer is no for too many days in a row, I know I need to change something"