That's not it at all, I don't think releasing late in the cycle has a significant effect on game sales, look at GoW 1 & 2 which sold 4.75/4.25m. The problem with DmC is that it doesn't appeal to most of the old fans, it was an unnecessary reboot, it's not good enough for word of mouth to be great and there's alternatives that people chose instead (MGR:R & GoW:A).
And don't try to compare it to the God of War: Ascension decline from God of War III, it's not the same situation at all. That happened because Sony marketed the game so poorly that a lot of people thought it was just a multiplayer game, it released a few weeks after the PS4 was announced, it's a prequel nobody asked for, it was only very good and not a masterpiece like all the games in the trilogy and to be honest I doubt any hack 'n slash game will ever come close to GoW III again (5.2m sold in a little over 2 years, over 6m now) only GoW IV can so the decline for GoW:A was expected by everyone.
So God of War: Ascension still did amazingly for an exclusive h&s game, it's still on-track to outsell the bestselling DMC (DMC4 at 2.7m) which already makes the 'decline' comparison to DmC just a bit silly as one is a relative failure and the other still a huge success compared to everything in the genre outside the GoW series. You should have compared the decline from NG2 to 3 with DMC4 to DmC, that make MUCH more sense.
Sony marketed the game poorly? Have you got links to Sony's marketing budgets now? Can you tell us how much it cost to market God of War Ascension. I don't think Superbowl adverts are cheap. But you seem to think that Superbowl adverts 'are poor marketing'.
God of War Ascension is the worst reviewed game in the series. There is not covering that up. A lot of fans who bought the previous games didn't buy this installment including myself. We can gauge that among those fans some of them didn't buy it because they didn't like it in comparasion to the other God of War games.
"It's obvious why Ninja Theory tried to make DmC more like GoW but it didn't work out for them."
I'm not sure where this idea has come from:
Ninja Theory made DmC the way Capcom asked them to make DmC. Even though you can't do things like that in God of War, that dosen't make it a worst game, its just a different style of action game, its not better or even worst. Besides DmC has recieved higher critical reviews than God of War Ascension. And the creator of the God of War series (David Jaffe) admited at the time of God of War 2's release that he felt God of War didn't meet Devil May Cry in terms of combat level.
Now I'm saying one is better or worst; their two games that play very differently. There are fans who enjoy both, including myself.
Regardless, this is a sales site, and sales data is available for the week of DMC4's release. I don't have time digging up that information now, but what you will find is year on year declines in all software numbers sold in the charts since then. If you have access to Sony's shippments for God of War 1 and 2 that might be useful.
Interstingly you should have a look at Amazon UK. God of War Ascension is at £20 and DmC is at £27 having come out 2-3 months prior. In the case of God of War I have a feeling that title is fast approaching the bargain bin. I'm not saying that means anything, but maybe it does tell us something...