2 out of 3 companies seem to be doing fine.
This. I don't really understand the obsession that console platform holders cannot innovate what they bring to their own platforms, and in turn grow their base. Consoles are devices like any other, they're just specialized for specific types of gaming experiences. If gaming is the biggest entertainment form in the world, then there's no real reason other than lack of innovation why consoles can't grow their share of the pie.
However, for PlayStation in particular, it means finally realizing that Xbox isn't their only competitor. In fact, thinking the scope of consoles is just Xbox vs PlayStation hurts the latter IMO because it stifles what innovation they could be doing to be more competitive with platforms like Nintendo and Steam. There are two braindead improvements Sony could do in a matter of a couple months or so: transparent player metrics/CCUs and integrated forum communities.
Just those two things would add a lot of value for hardcore & core enthusiasts, and potentially be appealing to some mainstream and casual players, and would also make PlayStation more competitive with platforms like Steam. It could even force Xbox and Nintendo to better compete and follow suit. There are many more examples than just that, and ironically some of the things I was suggesting Microsoft could do for future Xbox devices (not sold on the traditional console business model) are things that could make Xbox or any platform willing to implement them more competitive with non-console gaming devices and ecosystems.
I do think growth on non-console platforms is possible
WITHOUT cannibalizing the appeal of your consoles, but it has to be a multi-layered and nuanced approach that, preferably, always leads back to something new and special for the console itself, so show (not tell) that the console is always the priority even within that expanded ecosystem. Microsoft have utterly failed at doing that which is why Xbox Series has been in such dire sales decline; Sony and Nintendo never need to follow that same mistake.