The charts I've seen on Statista are sometimes rather dubious. Assuming the figures for software revenue in this one are accurate, there's still a glaring issue with it: Every year after 2020 is a projection, not actual figures. Also, MS's fiscal years start in July instead of April like Nintendo and Sony, so they might not even be synced properly if the chart is using fiscal years instead of calendar years.
In any case, Nintendo's software and hardware sales were substantially higher during the past two fiscal years (the April 2020 to March 2022 period) than at any other point in the past decade, and that's with them unifying everything under a single platform. Is it as high as it was back when we had the Wii and DS both doing gangbusters at the same time? No, but that period was an anomaly, and we shouldn't expect Nintendo to stay at those highs. Now, as we inevitably transition from the Switch to the Switch 2 (assuming they stick with the hybrid form factor), there will be a bit of a cyclical dip, but it's unlikely to be anything unhealthy for Nintendo.
TL;DR: Nintendo, and the console market writ large, is doing fine.
True, it depends on what you consider a healthy market to be. It's still healthy in the sense that it has matured and will stick around like it currently is.
However the growth has gone and all the claims that publishers keep making bigger and bigger profits is what I have my doubts with. The main argument against raising prices seems to be "pure greed".