It's not that kids don't WANT them... they just don't have brand loyalty to them--is how I perceive it from my vantage point as a father.
And on top of that, they don't have brand loyalty to the games themselves either.
From where I'm sitting, it really seems like it's the nature of the televisions themselves that is driving this change.
When I was a kid, you really felt the connectivity between the console and the television--whether that was through hooking it up yourself, changing the input yourself, not being able to do anything else other than game on the tv, because there was no internet or streaming.
But kids these days, they want for nothing. You turn these new smart tvs on, and its like "oh, good morning sirs, heres the last 10 shows you streamed, and recos based on them. Here are the consoles you have connected, and some games you've been playing. Here are some offerings on streaming platforms you haven't yet subscribed to. Your favorite team is playing tonight, would you like to watch?"
Every piece of media, be it a game or a show, is just a drop in the bucket of the collective experience known as "screen time."
IMO, just MO, but IMO, Sony should ditch the Playstation console cycle and move into the TVAC model: TVs as consoles. The controller could be the tv remote, with motion sensors in it so when its flipped horizontally the inputs are different and it turns into a game controller. Various sizes of TVs could be priced differently (obviously), and various console horsepowers could also be offered on various sizes. The iterations of consoles could stop, and you could just have them given some arbitrary number: basically this is the playstation tv 7000, then the 7500 comes out a few months later, slightly more powerful, then the playstation tv 8000, and on and on. So the consumer is then saying "I want the 40" Sony PS7500TV."