Graphics aren't all that important. Sure enthusiast care but they aren't the majority of the market. Consoles weren't always a smaller section of the gaming market. They hit a peak and that's their limits. People come and people go but the takeaway is that those numbers mostly leave them at the same place. It doesn't ever really need to be abandoned when the tech reaches a certain level it will just shrink as people feel they don't need to buy them over other avenues.Realtime graphics still have a long way to go. When they start making CGI movies with cellphone processors then I will believe it.
Consoles are actually dirty cheap now. They are cheaper than cellphones. Console gaming will always be a smaller segment of the gaming market. That doesn't mean companies are going to abandon billions of dollars in total addressable market. I expect to see more timed console exclusives that go to PC after a year or 2.
Hell Apple made more in gaming revenue than Nintendo and all they do is have that subscription service and collect 30% from App Store sales. Apple isn't making any games.
Apple earned the third-most gaming revenue in 2021, outpacing Microsoft & Nintendo | AppleInsider
In 2021, Apple ranked third in gaming revenue amongst global public companies, just behind Sony and ahead of Microsoft.
appleinsider.com
Console gaming is becoming more and more difficult for companies. They in the beginning at least lose money on the hardware. The cost of producing these games continues to rise and the console business model encourages you to forsake selling to many millions to keep games exclusive to your ecosystem. If you look at it objectively it's not the most attractive avenue in the gaming business. 10 years ago most wouldn't think Sony would be pushing their games to PC but that's where we're at. I bet if the console segment was growing at a healthy clip they wouldn't care to do that like they didn't in the past.