Society is moving to mobile and tablet gaming. Traditional gaming in front of a tv with a controller is going to continue to decline. So, it depends on how you define recession. 

When you think about it, people that enjoyed gaming in 2005 didn't stop. They just migrated. 

No... not for home consoles.

We'll have to see how Switch performs in a world of smartphones. Regardless Mobile Games are still part of the "game industry".

People are getting tired of buying the same game over and over, dats whats goin on.

The simple answer is that you only looked at certain games to make a point instead of the industry as a whole. A typical case of confirmation bias.

Just like music artists can't sell 100m copies like Micheal Jackson did with Thriller, games tend to sell less than they used to. Why? Because people have more options. So while back in the day everyone would listen to MJ, now they listen to all sorts of genres and artists. They also buy digital singles much more than albums (or even use youtube/spotify).

Same with games. Digital sales have risen. The average gamer, thanks to f2p games on mobile and tablets, as well as all the indies on PC, has a lot more options than (s)he used to.

So in order to talk about a crash, you have to look at the total sales numbers. How much money has been spent on consoles/handhelds/pcs, dlcs (which didn't exist back then), microtransactions, and services like Gold and ps+ ?

That's a serious question, btw. I'd like an answer.

Including Digital the PS4 is already the 9th best selling (in terms of software) video game system of all time.

The same thing could be applied to movies and yet people still watch on a TV or go to the theatre. I'm not seeing any reason to think that traditional gamers' numbers are declining.

My God it's almost as if install bases for the newer games is significantly smaller or something...

Since Pokemon stretched its arms into mobile, sales for Sun and Moon are up.

The industry is evolving and growing, not crashing.

I don't think gaming is having a crash or so however I think last gen effected the gaming industry in a really bad way they made a 70% complete game and you pay 60$ for it than you have to pay for the dlcs and that's extra 30$ or maybe more and this method followed this gen too, but I think the consumers are more aware now so instead of paying 90$ for a game at launch they can just wait a couple of months and the game will be cheaper they can enjoy the full game with only 30$~40$ and that is just my opinion 

The crash we may end up seeing is on the development side. With production costs skyrocketing so much that even selling 5 million you can't break even. It did happen last gen with Treyarch, they developed Modern Warfare 2 and still filed bankruptcy, this is more on Activision fault, but you get the point.
This gen we are seeing the rise of indie and the beginning of the fall of the AAA.