A sizeable chunk of the gen over gen decline was caused by developers betting on the wrong horse due to bad analyses. This was especially true for handhelds where lots of previous development resources were allocated to mobile games despite no proven formula for success being established. The direction back then wasn't based on market data which would have been games developed for handhelds that underperformed being the reason to go elsewhere; instead there weren't usually handheld games to begin with, all based on the belief that portable console gaming will be wiped out altogether imminently anyway. Another sizeable chunk of the gen over gen decline was the result of self-inflicted wounds by Nintendo, Sony and Microsoft as four of the five consoles of the eighth gen were below average or even outright poor in their concept/execution.

Your reduction of handheld gaming to handheld-only is lame when the hybrid Switch is more than capable of providing an adequate portable gaming experience. But that's the thing about Switch since the beginning of its existence, it will be declared as only this or only that depending on how it suits an argument. It's even more prevalent that Nintendo's home console market will be declared dead because Switch isn't a stationary home console. But at the end of the day it's undeniable that Switch consoles have seen heavy use as both home console and handheld devices (excluding Switch Lite which is handheld-only). So logically, Nintendo has remained in both the home console and the handheld market; it's just that the clear distinction of the two markets in the past does not exist anymore.

It was around 2015 that platform choices became more based on market data again. Mobile gaming proved to be unsustainable for bigger productions, "big" in this case meaning already anything that necessitates an initial asking price of more than $10. And even the $5-10 bracket constituted already a gamble on the developers' part. This market correction certainly helped the consoles of this generation which combined will sell more than the previous generation's consoles despite the number of platforms shrinking from five to three.

Lastly, the comparison against the seventh generation is always tough, because the seventh gen had seen astronomical growth of ~230m against the sixth gen. In other words, the eighth gen sold almost as much as the sixth gen, the difference between the two being under 10m. Which is still bad for the eighth gen because an ever-growing population with enough disposable income for video games should result in growth by default. But it's not the apocalyptic result that signals an inevitable end for consoles and by now the ninth gen has already gone long enough to safely conclude that it will be more successful than the eighth gen.

Well, there are a few with great ratings (mostly ports of PC or console games):

https://www.metacritic.com/browse/games/score/metascore/all/ios/filtered

I had a lot of fun with iPad games for almost 10 years (especially point&click adventures and HD-ports of the Ace Attorney & Professor Layton series, where touchscreen controls are fine and the additional screen space is a big plus compared to handheld screens).

But I've moved on to Switch and especially Steam Deck for gaming on the go.

A lot of popular top grossing mobile games are largely, if not completely, dependant on the video games or anime, etc that they are based on.

Dragonball Z Dokkan Battle for example had grossed over over $3 billion as of August 2021, and it's still going strong to this day.
Compare that to the Dragonball Super Broly movie which only grossed $116 million worldwide.

Does that suggest that they should just focus on the mobile games?
No. Because the movie provides more source material for the game (new characters that people can spend money to obtain), which in turn makes it even more successful.

There are popular mobile games based on videogame brands as well such as Final Fantasy, and it's the same thing there. 

However, even for mobvile games that have no correlation to an already established brand that it depends on, I think a lot of people delve into both.
Console gaming when they are home. And a bit of mobile gaming while they are at work or on the go, etc.

I'm sure gaming companies are well aware of this.
It's similar to what Shuhei Yoshida said about The Last Guardian. He said Sony knew it wouldn't be a huge seller, but that games like this are also neccesary. 

You have to understand that to finance types, a mature market might as well be a dead market. The only care about growth, as rapid as possible, and console just isn’t growing as fast (or arguably at all) compared to mobile.

It was silly at the time and is still silly now. Just because something is not experiencing explosive, compound growth, does not mean it’s valueless or about the die

Subscriptions are trying to change that though. (while games on consoles are mostly from buying the game) MS throwing everything day 1 on Gamepass is eating into game sales. Plus the abundance of discount sales and f2p have diminished the perceived value of games a lot. There is a lot of resistance against $70 games, even though that's still low when you take inflation into account. And you still have to put up with MTX and season passes.

Revenue models on console are creeping closer and closer to mobile revenue models. Console gaming isn't in danger, but the AAA linear single player console game kinda is. Only the biggest franchises survive. The rest have to adapt to new revenue models.

Yes necessary to keep selling consoles. A diverse line up is what is needed to keep them attractive.

And sure plenty people play on console when home next to mobile, but it's not an even market at all. Estimates suggest there are over 2.2 billion mobile gamers! No wonder MS is eyeing that ocean with the acti-blizz acquisition.

Console games also benefit from movies, tv shows, and books. Spiderman, Batman, Harry Potter, the list goes on. But the reality nowadays is that there is more money to be made in mobile games. Cheaper to make, magnitudes larger audience to reach, so much more successful selling MTX which is where the money comes from. Huge popular games still generate good revenue from sales on consoles, yet mobile is surpassing that.

The hunger for big console games is still there, Elden ring generated $6.85 billion in revenues for Bandai Namco. But that's the exception nowadays. Overall mobile performs better. Hence we're seeing more and more GAAS games now and games like Elden ring are in the minority. (Which is also a factor why it sold so well, fewer and fewer quality alternatives)

How long can we keep on blaming the pandemic for the slow turnout of AAA console games this generation?

We literally get this every console gen that shows up.

PC to journos and some warriors are always dead per new console gen.

It's a mobile device. - The fact it can dock, doesn't change that fact.
My Samsung Galaxy S23 Ultra has a dock and interfaces with my display, it's actually one of the benefits of USB-C.

In-fact if I go back to something like the old Lumia 950XL you had the Microsoft Display dock which turned the phone into essentially a PC using continuum.

Phones and Tablets have docks and predate the Switch's docking technology. - My tablet is always docked in the kitchen, it never leaves it, I use it for fire alerts.
But they are still mobile devices.

But what reinforces the Switch being a mobile device and not a home fixed console or even a hybrid is that, regardless that is has a touch display, mobile SoC, battery and can be taken outside of the home...

It is the Switch Lite. Which can't do any of that anyway,

The one big caveat of having a single device on the market though is that, if you screw up... I.E. A WiiU/Vita moment, then you don't have a second platform to rely on to bring in revenue, it's more inherent risk.
This was evident with the 3DS line picking up the slack from the WiiU.

Yea I remember how dumb alot of people looked in the early 2010s thinking that "consoles are gonna be a thing of the past and people will just game on mobile games". I would see even bigger gaming youtubers like Reviewtechusa make a video in 2013 saying that by the end of the 8th Generation consoles will be dead and people will just game on smartphones just cause he was playing a basic ass shooter from gameloft with bad touch controls on a mid range smartphone on the TV, here's a video of it right here and it's hilarious to see how poorly that take ended up being lmao: https://youtu.be/3i-OUoCOIn0

Ngl when I was first introduced to smartphone games at that time I thought there mightve been a possibility that they would eventually take over consoles, but then I quickly realized that there was little to no chance it would've after I started playing the games.
While it's true that smartphones can become quite powerful machines capable of running console like games, the biggest problem I had with mobile games is the dreaded and horrible touch controls, it's hard to play any serious or precise playing games with touch controls which was a huge turn off for me to ever believe that they could take over console games. While yes, I know that Bluetooth controllers exist that could connect to smartphones as well as ways to connect to the TV, but just connecting and buying a separate controller to play games on a smartphone was way more of a hassle for most of the general consumer base to care to buy and play on a controller for smartphone. Also it's good to mention that the online infrastructure for smartphone gaming is shit and alot of the games performance wise just can't compete with what's on consoles because smartphones with gaming will always be at a disadvantage even with great specs cause they won't have cooling fans so games can't run at full throttle, also games use only a small fraction of the full processing power on smartphones cause the smartphone OS utilizes so much of the processing power just for notifications and managing a ton of other background applications unlike a console which has a much simpler OS which allows games to use a much larger fraction of the processing power, and since mobile developers prioritize making their games compatible with as many smartphones as possible, they would purposely reduce the game's true performance potential just so it could be compatible with older smartphones.

And the performance gap between smartphones and consoles is still big enough to where people would still much rather play on console, which led to less developers making console like games on smartphones which led to a constant cycle that led the mobile looking less and less appealing with less major 3rd party games coming over.

PC gaming is dead years were even more hilarious.

Another thing that seemed appealing with mobile gaming outside of convenience and having all your media on one device is that most console like mobile games were either free or at a very low cost compared to the 60$ games on console, making many people believe people would rather just play games on smartphones instead of console for now on since they won't need to buy an expensive console or games when a smartphone could do all of that. Clearly that wasn't the case cause like I said people can't take games with touch controls seriously and won't bother with the hassle of buying or connecting a Bluetooth controller to smartphones and that the games on smartphones never got close to mimicking what we saw on consoles, making a more expensive consoles and games worth it still for most consumers.

However, it's not like smartphones didn't take any market share away from certain consoles, the 3DS sold only half what the DS sold and I think the obvious reason is that the casual gamers who played on DS moved to smartphone and tablet games and were content with playing very simple games on smartphones cause they didn't need to spend money on a separate gaming device and expensive games.But I think more importantly it's just that Nintendo didn't have an appealing enough concept with the 3DS and in a lot of ways it was too similar to the DS, and players won't care that the 3DS is more powerful.

Tbh because of smartphones gaming not gonna lie I thought that it would've been near impossible for Nintendo to reach Wii 100Million sales numbers again, let alone any console reach PS2 level sales cause I thought that a big portion of casual gamers who purchased game consoles before wouldn't buy a console again. However clearly I was very wrong as the Switch not only surpassed the Wii in sales, but now has a good potential of becoming the greatest selling console in history. If you told me this in 2015 that the Wii U successor will do numbers like this in a smartphone dominated era and with how poorly Nintendo was doing at the time I would've laughed at you and assumed you were trolling, but here we are. And I'm glad consoles are still more relevant than ever cause I would've never wanted to transition to mobile gaming.