Ehhh... I hate to be that guy but things are not actually quite the same..

7th GEN
Wii=101.6
PS3=87.4
360=85.8
DS=154.0
PSP=80.8
Total 590.6

8th GEN
PS4=130
X1 = 55
NS = 100
3DS = 78
Vita=16.5
WiiU=13.6
Total 393.6

I mean, it is easy to get caught up on PS4 and Switch's apparent success, but people tend to forget that the handheld segment from Sony dissapeared, while Nintendo had to merge its two segments into one, and yet, even counting NS, 3DS and Wii U as part of the same generation, the numbers don't come even close.

And I´m not saying this shrinkage will continue as we don´t really know. But the shrinkage happened. There is no way around it.

By your numbers, PS isn't really shrinking very much.

7th GEN
PS3=87.4
PSP=80.8
Total 168.2

8th GEN
PS4=130
Vita=16.5
Total 146.5

The difference is -21.7. However PS+ and PSNow subscriptions compensate that and adds up more.

Handheld is gone tho.

Another mistake is to put at the same level of success hardware/software sales from consoles and handhelds. The profits Sony received with PS3 and PS4 were much more higher than PSP or PSV, so selling more consoles despite selling way more less handhelds will still be way more profitable this gen for Sony. 

We should stop comparing in threads like this handhelds with consoles, they are not the same market, like we don't compare here ipad/smartphones sales. They don't have the same level of costs (production, marketing, ...) and they definitively don't have the same level of income either (dlc, mtx, higher selling prices....)

That's why Sony didn't care to lose the handhled side of the business because it wasn't enough profitable to them, and why Nintendo decided to mix their handheld and home console divisions into a hybrid model like the Switch.

Simplicity provides a way to maximize way more the profits. Sony will never make a handheld again and Nitendo will never make exclusive software for a exclusive handheld either. What we will see from now on is cheaper versions of the hybrid console where you will only play in handheld mode, like Switch Lite.

By your numbers, PS isn't really shrinking very much.

7th GEN
PS3=87.4
PSP=80.8
Total 168.2

8th GEN
PS4=130
Vita=16.5
Total 146.5

The difference is -21.7. However PS+ and PSNow subscriptions compensate that and adds up more.

Handheld is gone tho.

Main highlights-
PS4 HW: 100m
PS4 SW: Over 1 billion
PS+ Subs: 36.2+ million

Not bad.
Didnt even notice the over 1bn in software until I saw a tweet by ZhugeEX

Avg PS4 user has bought more than 10 games.
How many consoles reach attachment rates this high? and PS4 will still have a few years more to build that up.

That is a very high attach rate. Especially considering the number of people who bought the PS4 and the Pro, like myself.

The average price per game has dropped given the rise in indie games, so that's one factor to take into consideration. But also, does Sony count free PSN games? I would assume not, otherwise that number would probably be several billion higher. With the monthly PSN games, my PS4 library is probably close to 100 games or so.

I totally agree with you that in this process Sony has remained the more healthy out of the three. Still, trying to deny the fact that the market has changed for the worst and that IT MIGHT continue to change is not going to do anyone good. Hopefully the people in charge are aware of this and are making the necessary arrangements to keep thriving in the business. Nintendo has already taken the first steps by merging their two segments and opening up to the mobile market, and MS appears to be paving the path to move away from Home consoles if they see the need to do so. As of right now, Sony is the one the looks more confident about the traditional business model (and for good reason). Let's see how this turns out.

Sony is also the pioneer on streaming and the only one of the three with a solid VR product. Sony is more ready for changes than many think.