British number four Watson enjoyed a memorable charge to the fourth round, her best showing in any grand slam.
But a quarter-final spot proved beyond the 30-year-old from Guernsey as German youngster Niemeier won 6-2 6-4.
It was a classic case of ‘after the Lord Mayor’s show’ as the crowd were treated to a parade of former champions including Rod Laver, Billie Jean King, Bjorn Borg, Andy Murray and Roger Federer beforehand to celebrate Centre Court’s centenary.
Unfortunately, the atmosphere fell flat as they witnessed what has been a familiar sight over the last 100 years, that of a British player being knocked out.
“I felt like the match was kind of flat because of the style of play. I felt like in a way I was playing like a serve-bot type thing,” said Watson.
“I was just trying to make as many returns as possible, holding on to my serve. It felt like more men’s tennis today than women’s.
“The points were just so quick. Like my last match, there was so many great epic points with slices, coming to the net. I didn’t feel like the rallies were long today at all, so maybe that had something to do with it.
“But I still felt the support, especially at the end there when I needed it. Yeah, I felt super supported out there today.”
Niemeier, 22, may be unseeded but she beat number two seed Anett Kontaveit in the second round and illustrated her quality with a stunning winner from the baseline as she chased down a Watson lob.
It was a disappointing first set from Watson, who was broken twice and swatted the net in frustration after missing a simple volley to bring up set point.
Home hopes were briefly raised when Watson confidently broke for a 2-0 lead in the second, but she was unable to back it up and double-faulted as Niemeier hit straight back.
Two more double faults in her next service game spelled the end for Watson as Niemeier wrapped up victory in an hour and 17 minutes.
Nevertheless Watson, who pulled out of the mixed doubles due a knee injury, will regroup for the women’s doubles with fellow Brit Harriet Dart.
“I’ve had so many falls. I’ve got bruises everywhere,” she added. “My knees are pretty unstable right now.
“I love playing doubles, especially with Harriet. Yesterday when we stepped on court, I just had so much self-belief in us, even when we lost a break or went down in the score. I just think we’re such a good pair.
“We complement each other. I’m definitely I’m going to put everything into the doubles now.”