Japan console market is nearly dead and Europe isn't as big as the American market. The rest of the markets are pretty much small peas compared to those three giants.
Unless China suddenly gets really excited for console gaming this is basically a large amount of the market suddenly shrinking which means a decrease in demand which is not good news in the slightest.
For example, say that you produce a news show. Most of your audience is older people (65 and up), some is middle age and you used to have a large amount of young people watching your show but they no longer watch it. It's alright, because more older people came in to fill that gap. But say the 65+ group stops watching it. All you have left is some remnant of that group and middle age. That's what people are afraid is happening.
You're assuming that Japan will continue to be dead, rather than ramp back up as handhelds fail to occupy the "almost as good as your last console" niche and American platformholders no longer run away with the console market.
You're also assuming that Europe won't continue to grow, as they recover from the crash of '08 and Sony takes more serious steps outside FIGS.
Both of these are poor assumptions.