I mean, on the one hand, this is correct. The Circana report was seriously bad news for the industry as a whole, because it shows that the "normie" segment of the market are feeling the price crunch and starting to look elsewhere for entertainment options. This does raise the possibility of a serious market contraction. It's too early to know if this is a fluke or a long term trend, but if it's the latter that would be a major problem for Nintendo, Sony, and basically all third parties, as well as Microsoft.
On the other hand, there's no denying the fact that Xbox's hardware collapse had been uniquely catastrophic in a way that's just not comparable to Nintendo or Sony. They started in a tenuous place this gen and have been hemorrhaging market share since they raised prices earlier this year. Black Friday just confirmed how bad things are for them.
Denying either half of this situation is basically just cope and spin at this point.