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Adinnieken on 11 May 2012
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To put April 2012 into perspective, with regards to the three home consoles, the sales numbers are actually very similar to 2007. The major difference is that in 2007 Sony was still selling the PS2 with sales that exceeded the PS3.

In 2007 the Wii was the top console, Xbox 360 second, and the PS3 last. In 2012 the Xbox 360 is the top 130K below what the Wii was at (360K), the PS3 is in second likely above what the Xbox 360 was (174K), and the Wii is in third likely above what the PS3 was (82K).

Personally, I think Nintendo's announcement of the Wii U is what created the decline in the gaming market. There was no beneficial reason for them to come out with their announcement of the Wii U at E3 last year. In the best case scenario, it would ruin Wii sales, in the worst case scenario it would ruin all console sales. The first quarter of 2011 saw a slight decline over 2010 sales. The second quarter of 2011 saw a 100K decline. After the Wii U announcement, the third quarter of 2011 saw over a 300K loss, and the fourth saw a 1 million unit loss.

The Wii U announcement was premature and neutered the gaming market. Consider for a moment, that the Wii U announcement never took place, there would be less certainty when the new generation of gaming would begin, there would be less hesitation on purchasing a new console in an effort to wait and see what benefits there are to the Wii U. Any questioning of that would have been delayed until June 2012, when the pre-launch announcement happens.

It may have been that for Nintendo, they already reaped all the benefits of the current generation and felt that an announcement of their next gen system would sink the industry sales and both Microsoft and Sony's future plans. Or they may have just made a bone-headed move that killed the entire industry.

As I've mentioned before, the Osborne Effect is a very real and dangerous thing for any company. Announcing a new product before you're ready to roll it out, will dry-up your market. In this age, where technology moves even faster than in the 1980's when the Osborne Effect was coined, it can have a dramatic effect on the entire industry as well.

Had Nintendo not made their announcement when they did I believe strongly that 2011 would have been a better year, and while 2012 would still be in decline, it wouldn't be as soft as it is.