Overall hardware sales decreased significantly, even as Xbone/PS4 had very good months.
This is compatible with market contraction. For people who are either not well versed in Economics/Market studies or who are not well versed in games in particular (or both), this may seem superficially confusing.
A clearer example of this can be seen with software; people will point out that GTA and Elder Scrolls are selling better than ever, and wonder why anyone could suggest that the software market (in this case I mean the console retail market) is contracting.
Generally speaking, the only time we literally see everything in an entire market start selling worse is when a market collapses entirely, not when it contracts. A complete, uniform reduction in sales would spell imminent doom, and we don't see that. Contraction is not so disastrous, and tends to present with the winners winning more and the losers exiting the market, until only a few companies / franchises can still be classified as "winners." We can see that quite clearly in the console software market.
In the hardware market contraction, we'd expect to see casual consumers exit first, and that's what we're seeing in two ways; first, Nintendo had a disproportionate share of casual users, and is clearly being hit the hardest. Second, Sony/MS's last generation machines are selling unexpectedly poorly, which indicates there are fewer late buyers than people anticipated, and these buyers are disproportionately casual too. Further, if contraction is happening, we'd expect to see the remaining consumers spend more -- that's how markets tend to compensate for the loss of a broader consumer base -- and again, I believe we're seeing that.