Funny to see people tripping over themselves to proclaim that "the fad is over".
Pokemon Go had an insane lightning-in-a-bottle sensation of a launch, and as such they could never hope to retain all of their users. People who don't even play many mobile games were downloading it and trying it out just because it was the talk of the town. All those soccer moms and baseball dads were never going to be daily users. At best they were hoping to have a fun family activity for a day out at the park, or understand the phenomenon that was consuming their children.
Think of it like this -- CBS is airing the Superbowl. CBS decides that they are going to premiere a brand new TV show after the game is over. So now this completely new show that nobody has ever heard of suddenly scores 50 million viewers for the premiere. Awesome, great. But those numbers will never hold.....when episode 2 airs and ratings go back to exceptional-but-lower numbers (say, 15-20 million viewers), that doesn't mean the show is suddenly flopping or that the fad is over. It just means that going forward they won't have some unprecedented momentous event building hype and generating more customers than would be possible under normal circumstances.
Niantic has a lot to do if they want to retain the tens of millions of users that are still engaged, but expecting them not to lose a lot of users that were only there for the hype is unrealistic.
I think first and foremost they have to find a way to make the game fun and engaging for people that aren't in densely populated urban areas. People claim that nerfing the radar killed their prospects, but as far as I can tell most people aren't even playing the game like that. Most players just find an area with a concentration of Pokestops, throw down lures on all of them, and walk around until interesting stuff turns up. Yeah, maybe they'll go a little off the beaten path if a Snorlax turns up on the radar, but by and large nobody goes out with the intent to track down Pokemon using radar.