Is shrinking market size all that bad?

[Dr.Henry_Killinger]

Puppyroach said:
We can also look at it this way:

Imagine Gen 7 ending in 2015 at a totaL of 280 million, up from 200 million in Gen 6. That is an average growth of 4% per year over Gen 6 (not entirely accurate since generations cross each other somewhat, but it gives a hint). That isn´t a huge growth, but actually quite reasonable.

If the market would start to experience contraction, money will start to pour out of the industry causing more studios to stop making games for the traditional consoles. This will also start a downward spiral in the general publics view of the industry, causing even bigger declines in sales.

I Think an average growth of 2% per year over previous generations should be acceptable enough to maintain a steady industry.

This isn't entirely true or very realistic. Money poured into the industry because these companies started making more money, because of more consumers. To suggest that money would just leave with less consumers is overly simplistic. Enticing a smaller market to spend more money would easily palliate its effect if not make more money overall. 

Not to mention these companies aren't just going to die, they are going to refocus, either attempting to draw in more consumers, or drawing more money from consumers.

Sure this could mean more money grabbing, but this could also mean greater quality.