I thought of another way to look at the decline in hardware sales...
If you separate out the handheld decline as a seperate issue, and the Wii decline, is it possible "core" consoles are not declining? At least at a preliminary glance, I think so.
If you think PS2 sold 150m and Xbox 25m and GC 20m, that's ~200m. Last gen we had 80+80 PS3+360. Looking at core consoles only. Similar totals.
So for example if we go back to July 07 and only look at the core consoles, we had 222k PS2, 170k 360, and 159k PS3, total of 551k
Now fast forward to July 14 and we have, core consoles, 187k PS4, 131k XBO, 81k Wii U (yes I consider Wii U core unlike Wii), 54k 360, 32k PS3, total 485k. Not so disastrous a drop.
Looking at it quickly it looks like it would hold up for comparing to most months in 2007, and if the theory is right, any year.
I looked at another random month, February 2008. We had 281k PS3, 255k 360, and 352k PS2. Total 888k. At a glance I figured no way February 2014 can hang with that, due to that huge PS2 number. Wrong. February 14 featured 268k PS4, 258k XBO, 103k PS3, 82k Wii U, and 114k 360. Total 825k. Short but not by much. And that was with supply limited PS4.
It looks like clearly this isn't going to hold for every month. 2013 had some really really bad months as last gen cratered and nothing replaced it. However in turn Nov-Dec 13 were pretty insane, you had huge numbers for PS4 and XBO, while still big numbers for Wii U, 360, and PS3. That easily trumps say holiday 07, when you had decent numbers only for PS2, 360, and PS3 (among core consoles only of course).
It might be fun to add up these "core consoles" on a yearly basis over the last several years and see how that looks. Will probably do that later.