Dying Market? Sales have slowed, because new consoles are right around the corner ( everyone knows it, Console people tend to follow this stuff pretty closely ).
But over 100 Million Wiis Sold? 70ish Million XBOX 360s? 70 millionish PS3s? That's well over the number of iPads Apple has sold.
I'd hardly call it a dead market
The next Battle is in the living room, where Microsoft already has standing, and Apple has nothing.
Apple TV atm is a Joke, the XBOX 360 can do everything a Apple TV can do, and also play games.
I think you are missing a few things here. The 96 million Wiis sold is over 5 1/2 years, and the sales are dropping. 9 million were sold in the last twelve months. XBox 360 is doing worse. The "joke" Apple TV actually sold more units in the last quarter than XBox 360. They sell 4 million Apple TVs per year, about 44% of the Wii. Not bad for a "joke".
Apple sold 17 million iPads in Q2 2012. That's twice as many as Wiis sold in four quarters. The "battle in the living room" that you are dreaming of isn't happening. There may be a tiny "battle in the kids' bedroom", that's all.