Not really. It's just that the home console marketing has been in a downward slope since smart phones took over and the dominate form of entertainment. Major publishers and developers who've been in the game for decades have dropped out, companies have tanked. The cost and time of games now is hardly worth the investment, and that's why it seems like nothing really comes along anymore and you need 10 years to build a solid collection of games for a console.
Think of how many great games were on the SNES and it was only Nintendo's primary console for roughly 5 years. Personally, I think it says something about the state of games today being overly ambitious in their efforts, and overestimating what it takes to make a great or successful game.
I disagree with your assertion that console gaming has been on a downward slope. Combined console sales each generation have steadily risen. These are rounded figures.
SNES & Genesis: 80 million combined
PlayStation, N64 & Saturn: 144 million combined
PlayStation 2, Gamecube & Xbox: 201 million combined
PlayStation 3, Wii & Xbox 360: 273 million combined
PlayStation 4, Wii U & Xbox One: 79 million combined (less than three years in)
There are a ton of games coming out. But the reality is that gaming is dominated by big, AAA expensive-ass titles like your Halo, Call of Duty, Uncharted etc. with the other titles being made up mostly of indies which are 99% of the time released as digital downloads.
You are also completely off on your time table. The SNES was launched in '91 and discontinued in '99 in the US. That's eight years. It was followed by the N64 which was released in late '96. So while it was the primary system for only five years, it was available for eight. Comparatively, the PS3 was launched in 2006 and replaced by the PS4 in 2013. That's seven years. The SNES has 783 official games released for it while the PS3 has 1,023 and the Xbox 360 has 1,173.
So there is no huge discrepancy in the amount of games made for these systems. Development hasn't fallen off the map as you have suggested. And this also doesn't take into account digitally released titles. There are nearly 700 digital titles released on the PS3 and as many on the Xbox 360. Of those, several hundred were digital-only. If you figure 200 of those digital titles were digital-only, the breakdown by year looks like this:
SNES (since you mention this console):
156 games released per year on average
PlayStation 3:
174 games released per year on average
Xbox 360:
171 games released per year on average
Of course you cannot state without a lot of research that some of the game totals for these consoles didn't come after their successor had been on the market. For example, God of War II on the PS2 launched
after the PS3 was on the market. But it gives you an average estimate to go by.
While we have lost companies that were "in the game" early on like Konami and a few others, many like Bethesda, CD Projekt Red, Bungie and various Sony and Microsoft studios have risen up and taken their place. There are more development houses actively developing games now than there has ever been.
As for lower cost games, one need only look at critical independent hits like Ori and the Blind Forest and Song of the Deep. Games made on smaller budgets that decimate many of the 16-bit era games.
You should also look into the fact that in the SNES heyday, games ranged from $60-$80 new on average. Larger RPG titles like Illusion of Gaia were $80 plus tax! Over 20 years later, games sell for $60 on average. This in spite of the rises in income, cost of living, food, gas, etc. Developers are having to spend more to make games today than they did in the 90's and only taking in the same amount in sales. So they have started releasing post-game content/DLC. And even then, most indie titles sell for under $20.
Gaming is stronger now than it has ever been. I think you just see the 16-bit era through rose-colored glasses.
