The definition of a niche' market: A subset of the market on which it is focusing upon, having product features that are aimed at satisfying specific market wants and/or needs towards a -- traditionally believed -- small market, such as those who like salt and pepper shakers in the shape of animals, or the like, indicating that the product features are made with -them- specifically in mind.
A mainstream audience, as defined, is one defined at a much wider audience and has product features that would appeal to a -wide variety- of people vs the small variety that want specific product features as it was aimed for -them.-
Fallout New Vegas is a mainstream audience; everyone -within- the audience is mainstream, not because of the sales figures, or numbers -- though that contributes to it -- but because the product features within it are targeted at a wide demographic of people within the niche market. It isn't for the 'niche audience', it is for the mainstream audience, and no matter the features, if you have bought it, you are part of the mainstream audience, according to this definition.
Examples of a mainstream audience a product gears towards:
Cereal brands such as Lucky Charms, Cheerios, Cookie Crisps, or really the majority of cereal brands in general;
pots and pans;
music bands, such as Justin Bieber, Sean Kingston, Usher, Akon, etc.
Video games such as DA: O, Mass Effect 2, Fallout New Vegas, Fallout 3, Oblivion.
Examples of a niche audience:
Salt and pepper in the shape of animals,
music bands such as Creature Feature, Twiztid, Original Soundtracks, Touhou arrangements, Voltaire, etc.
Video games such as The Witcher/The Witcher 2, Dead Space: Ignition, Dynasty Warriors, Dynasty Warriors Gundam series, Samurai Warriors, Sengoku Basara, Hokuto no Ken Musou, Folklore, ICO, Planescape: Torment, etc.
Now, this does not mean they will always -be- in the niche audience. For instance, they may upgrade to mainstream once their products are fully out in the open and people are interested in buying them for those features; initially, they are in a niche market aiming for a niche audience, but they can upgrade to mainstream if their features are well-liked among many many people. This means that what once was a niche game is now considered a 'mainstream' game, as it is floating in the mainstream mindframe, and is considered by many to be a good game. Examples of this include World of Warcraft, and DA: O, but find their places rooted into the mainstream, as their features become much more apparent and well-liked among the community, therefore upgrading the niche audience status to mainstream.
A niche game that retains a niche audience throughout, but who's features haven't really been made/appreciated by a very wide demographic retain their niche game status, even if they are considered 'cult hits.' Examples of this include Folklore, Planescape: Torment, ICO, the Dynasty Warriors series, the Samurai Warriors series, American McGee's Alice, etc.
It's also a very loose term that gets thrown around a lot when it doesn't need to be.
Niche=/=Mainstream. You can't really lump them in the same place, because both terms are so very different from another and opinions differ so much that it's like arguing apples and oranges and then saying pears are a combination of both. There will be people who agree, people who disagree, and some who want to lump both into one when it doesn't really belong.
tl;dr version: Everyone's definition of 'niche market/audience' is different, and you should respect their opinions. However, if you are defining a game as niche' when it has broad appeal, you -are- in fact, making an incorrect statement. A niche game who has a niche audience that suddenly finds fame in the mainstream is upgraded to mainstream status, as the demographic reached is wider.
They are exclusive to each other, as both have very wide definitions, and very specific areas that define them in an understandable way, and what is 'niche' cannot also be mainstream, as per the definitions of both.
Just sayin' that to be more clear on the whole issue.