I'm sure the fact that console hardware is nearly twice the price that it was 6 years ago for the same system is having its damaging impacts (Series S was $300 in 2020, vs $500 in 2026).
However, the real pitfall will be AI and its ability to decompile older games. In recent weeks, I've seen more and more stories of people figuring out how to decompile older, console exclusives and port them to the PC (and other consoles). I also saw a headline that modders have gotten a PS5 to run PS2 games from a disc, rather than requiring users to re-purchase the digital version as Sony would require. Once the exclusives are ported to a PC, there will be less incentive for people to own a specific console.
To go farther, AI might completely ruin digital ownership. If anyone can decompile a game, then gaming may shift to streaming-only where the code can't be accessed for reverse engineering.