People are misusing the term, niche is used to describe a specialised segment of a mainstream market, also Yoshida was talking about console gaming and like Rol pointed out it accounts for 25 % of the total games market , it was a poor choice of word, he obviously was trying to demonstrate that the deal for Sony impacts a lot of divisions not just the gaming division,but instead he decided to play down the gaming division rather than playup the plan.
Now in regards to the 120m,if you total up Sony Nintendo and Xbox consoles it comes to around double that number and the percentage that own multiple units is most likely offset by figures that show higher active user numbers,still this is irrelevant since console gaming isn't a specialised segment of itself .
Niche also describes how something compares overall in the big picture and as it stands he's not wrong in that it's niche.
Even if you total up platforms sold by all holders it'll still likely be less than the 120m estimate as the are not only people who own multiple platforms the are factors like people buying more than one variant of a certain platform, the are people who sell one platform to buy another or don't buy anything after, the are people who may buy a platform to try the hobby out and figure it's not for them and don't bother in future, the are people who after gaming for a long time who just stop and move on from the hobby the are people who buy platforms maybe more not for their own personal use like youth centres etc...
Factors like these are why the estimate I gave is very likely overestimating how many gamers the actually are and why if two platforms sell 80m each it doesn't mean the are 160m gamers and also why the industry performance each gen is some what random in what platforms will actually sell.