Probably childs dying earlier than on previous gen.
Because he fails to acknowledge that PS3 lost 70M sales compared to PS2, but that was captured by X360 with also some people having both system and some market growth. As you already pointed console market have been somewhat stable to growing when comparing PS+Xbox on gen 6,7 and 8. The biggest increase and decrease in total size came from the big income of casuals from GC to Wii and then they not staying for WiiU.
While even though he try to pretend no one that bought PSP would buy a DS if it didn`t exist he just play blind on his on numbers, GB/GBA to DS saw an increase of 100-120M to 150M in a gen, while DS to 3DS saw a drop of 150M to 75M in a gen. If we pretend PSP had 0 influence on sales of DS and PSVita had 0 influence on 3DS (like if they weren`t even portables at all) it would still show the market shrinking because that would be a monopoly that had big increase followed by a much bigger decrease.
PS3 show that even with a very high price (nowhere can someone say that 600USD of it in 2007 crysis is less problematic than the 250 of 3DS in 2011), no one will question PS3 had worse performance on multiplats at that moment, a much cheaper competitor and an even cheaper Wii against it, plus the ~PS3 have no games. Even with all of that they were able to change the course of the PS3 and reach 85M. While 3DS with no competition, cheaper and with more games couldn`t and somewhat that have nothing to do with people that like portable gaming maybe prefering to just use their smartphones and tablets with free games than buying a HH and also buying each game for 40 bucks.
Assuming that lost sales need to go somewhere is a mistake. When the console market crashed in the 80's there was a point where Nintendo hadn't yet entered the game, and sales of consoles were just awful. People didn't move from buying Atari's to buying some other gaming device. They just literally stopped buying consoles. Both the 3DS and Vita were extremely underwhelming compared to their predecessors. When all options on the market are bad, the market will shrink. Smartphone games shaved about 20 million off the top of 3DS lifetime sales. But Nintendo's price/drought/naming/eyestrain shaved more off lifetime sales. A properly launched and priced 2DS XL in 2011 would have done 90-100 million units easily.
You said context was key. Obviously the PS3's drop was from the 360 grabbing a bunch of core gamers with it's better price and better performing multiplats. That's why PS3+360 is right around PS2+Xbox.
What grabbed 3DS's buyers? Sure as heck wasn't the Vita. It was mobile gaming.
You are making the same mistake as above. Nothing needs to grab buyers. What grabbed Atari buyers when the console market crashed in the 80's? It wasn't Nintendo. They didn't show up until after the crash. You can't explain Atari sales losses, by saying that they all went to Nintendo. What best explains it is that Atari and all other consoles sucked at that point in time. So people flat out stopped buying them.