The industry is trending downward now, and this year, the software sales are looking to be lower than they have been since the X360 launched.
By VGChartz data, year-on-year, software sales are down from 101.65 million to 83.5 million (for the period from the start of the year to week ending April 20th), or down 17%. That does, however, not take into account digital sales, meaning that the actual drop is somewhere between 12% and 15%, most likely.
In 2012, 477 million pieces of software were sold. If the drop continues to be about as large as it has been so far, we're looking at between 400 million and 450 million pieces of software sold for the year.
For a comparison, here's VGChartz data for previous years.
2011: 608 million. 2010: 630 million. 2009: 577 million. 2008: 584 million. VGChartz doesn't have reliable data older than that.
However, if you look at The Source's old shipment table,
You can see that no year prior to 2006 saw higher software sales than we're going to see in 2013. I'm aware I'm comparing shipments and sales here, but that ultimately doesn't matter in this case.
In conclusion, the end of the 7th generation (which includes partly the launch of the 8th) is seeing lower sales than we ever did in the rest of the 7th generation, but it's still performing slightly better than it did at the end of the 6th generation. Which means that there's no real cause for alarm quite yet - the 8th generation could very well see just as high sales as the 7th did.
In fact, I'd wager that the 8th is going to outdo the 7th by a decent margin. The current markets (Japan, US, Europe, Australia) are likely to stay on roughly the same size, but there are going to be vastly increased sales in emerging markets, as their economic levels draw closer to ours.
The industry is fine. Nintendo isn't going to do as well in the 8th generation as it did in the 7th, but it's still very likely to be their second best generation yet in terms of absolute sales.
