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People are going to point to the fact that 7th gen sold over 260m hardware between the three home consoles, and that this generation is a failure if it contracts and sells less. This generation is inevitably going to have less sales. Tens of millions of people bought a Wii that have no interest in buying consoles again plus this generation will almost certainly be shorter.

I agree with your post, overall the home console market looks healthy right now, and hopefully Wii U can improve and start pulling it's weight.