The industry isn't doomed, it just needs a serious dose of killer software.
-PS4 is killing the other 2, but when you look at history, it's really just doing alright. It only sold a few thousand more in it's 1st January then PS3 did. 90 percent of the lineup are games that you can play on your old console, and the only PS4 exclusive games are Knack and Killzone, neither of which got great reviews by any means and no one is calling them must have games by any means.
-Xbox One forcing people to get Kinect was all time stupid. Some people liked the 1st Kinect, but I know for a fact alot of people didn't think it was all that great. Now they are charging $499 for a $399 console and are forcing you to get an accessory that doesn't even impact gameplay. On top of that just like PS4 90 percent of games are ones you can play on your old console. The exclusives are Dead Rising 3 and Forza 5, neither of which are game changing by any means, and Ryse which saw mixed reviews. The software just isn't there right now.
-Wii U is missing everything. People buy Nintendos for Smash Bros, Mario Kart, Zelda, Donkey Kong, and a new very innovative Mario Game. The Wii did great because it was able to pull in a ton of casuals as well with games like Wii Sports and Wii Fit, but even without those games, the Wii still would have been a solid success in the 60 - 70 million range. On top of that Nintendo need's some bombshells. Metroid Prime focused on Multiplayer would help. Pokemon RPG would help alot. Zelda closer to the Ocarina / Twilight Princess style would help. Donkey Kong will help.
The market is just lacking the software right now. If you look at the start of last gen there were some very strong titles that were moving consoles. In the 1st year Wii had Wii Sports, Twilight Princess, Wii Play (With a Remote), Mario Galaxy, Mario Party 8, Mario and Sonic Olympics (Which was the 1st ever Mario+Sonic game, it was a big deal then), Super Paper Mario, Warioware, Mario Strikers, Metroid Prime 3, and Pokemon Battle Revolution. On top of that it was only $250, and it sold 16 million in 2007. Wii U's game lineup is weak as hell when compared to that, not to mention it's $299.
Things can and most likely will get better in the game industry, but it's going to take killer software from everyone. What has become very clear is consoles don't sell themselves. Yes the hardcore fans will jump right away, no matter what but they are really buying for the software that is coming in the future. Most people are content to wait, but the longer people have to wait, the worse the game industry is going to look.