TechCrunch writes the console market is in a crisis as the new generation consoles aren't selling very well when compared with previous generations. The console market seems to be shrinking significantly, in January 2007 a total of 2 million flagship consoles were sold in North America, whereas in January 2014 the numbers add up to just 700,000 units.
The article points out that there are several reasons for the declining console market. Casual gamers for instance are increasingly moving to mobile/web games, whereas high-end enthusiasts are flocking to the PC platform to get the best in class experience.
Why the shrinking console market? There are likely multiple factors in play here. Not least increased gaming competition from mobile devices. And, well, increased competition for free time in general. Since 2007 mobile apps have taken off, social networking has gone mainstream, mobile gaming has spawned huge casual gamer franchises like Angry Birds and Candy Crush and the rest, and mobile messaging has gone massively over-the-top to make IMing your buddies free and easy (and yet another pull on free time).
Another problem console makers are facing is rival devices’ faster refresh cycles. Mobile devices typically get upgraded with shiny new hardware every year. While, from the other side, top-of-the-range PC hardware is now outperforming console hardware – so really hardcore gamers looking for the best in class gaming experience (at least from a a graphical fidelity/frame-rate point of view) are actually better off with a high end gaming PC than the current console flagships.