I think it's a bit far-fetched to say that people are leaving home consoles behind for gaming on mobile phones and tablets. Microsoft and Sony haven't released a new system since 2005 and 2006 respectively. Hardware sales may seem like they're on the decline since everyone who wanted a home console has already brought one by now. Also, in terms of quality, mobile devices are a long way off from matching the games that comes on a home console. To me, it's like comparing apples to oranges at this point.
It's not far-fetched at all. Hardware and software sales in the industry have been down for the third consecutive year. Meanwhile whatever growth the gaming industry has seen was largely limited to the mobile/indie games sector.
You're vastly underestimating just how popular smartphones and tablets are as gadgets these days. They are what consoles were back in the mid 90s/early 2000s.
Both companies want to make their consoles multimedia devices. Matching the price points of far more popular platforms is a stupid move.