If we factor in wider console market there's growth. 6th gen combined sales from Microsoft, Nintendo and Sony was around 235 million, excluding handhelds. 7th gen it was around 324 million combined. 8th gen it went down to 241 million between PS4, XB1, and WiiU. 9th gen, Nintendo Switch is like 140 million by itself, and with combined Series X|S consoles and PS5's and time those will still be selling, I've no doubt we'll see combined gen-on-gen console unit sales growth over 8th gen.
Still, if we look at overall including handhelds, overall we see a decline in unit hardware sales between the big three. Perhaps another area to explore about the market is combined game sales revenues for software between all three. Companies aren't all that forthcoming with this information, especially with respect to digital sales. Sometimes quarterly/annual revenues for say Sony or MS game divisions focus on total revenues which hardware could be a larger contributor thus a lower profit margin.
I don't think gamers overall are losing interest. We live in an age of growing economic uncertainty and ever tightening budget for niceties for things like video games. Also the shift in gaming from traditional SP games to online live service games with MTX and subscription services changes the dynamics of the direction where the total video game consumer spending goes.
I also think at large, with consoles like PS5 and Series X|S having access to the larger 8th gen libraries, consumer have more choices of how to better spend their money when new full priced games come on the market. Perhaps they wanna play those games, but until the games reaches a better price point people are willing to spend money on, there's still a wealth of titles gamers can pick up cheap to hold them over.
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