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I don't think it's market saturation. Sales will slow down but not decline 'rapidly' like the title suggest. A combination of factor is also contributing to the yearly decline.

* Weaken economy in developed European nations
* Disruptions in the Middle East & Egypt
* Price point still relatively high despite console's age

So to summerise: yes we've peaked, but we have not reach saturation and the decline will not be rapid. There might even be a rebound if any or all of the above issues are resolved.