I completely disagree with that, and I think you’re looking at it the wrong way.
PS2/GC era: ~200M across all three
PS3/X360: ~190M (slight hardware contraction)
Gen 8: ~185M (slight contraction and that’s with Wii U bombing spectacularly.
Now: ~230M
True enough, it gets hazy when you add handhelds from the past and I see your point, but so much has changed since then.
We’ve got dedicated consoles, pc-adjacent handhelds, the explosion of the mobile gaming market, and Nvidia is now a multi trillion dollar company, and that’s without providing chips in any console hardware except for Nintendo which tells you the PC market is rapidly expanding too. Also worth noting that Macs are getting more titles too and it’s being increasingly viewed as a viable gaming platform. Finally, the Chinese gaming market really seems to be growing as Black Myth Wukong did INSANE numbers.
I think gaming in terms of content has stagnated, but the market? I don’t agree at all.