The problem comes to inability to produce compelling software for home consoles, in a basis way. Japan tried to emulate the western high production model, and they are failing to get people excited, resourses consumed by high budget games don´t give room for mid-tier projects, experimental projects, a new IP creations. The time for those projects is ridiculous long, it only accent dry periods (see TGS). Even small companies see few incentives to enter to the home console space because they don´t only compete with a excluding model, they compete against big marketing products, co paid in part by, yes! the same console maker. So yes, it´s not a healthy industry. On home console space of course.