That doesn't mean much at all. The 3DS is six years old, that doesn't mean that all 23 million 3DS owners are still actively buying games for it. Otherwise, Dragon Quest XI should have actually done much better in sales than it has so far.
You asked what the "real decline" is and you're saying that the life cycle doesn't address this at all? You think digital sales are having more of an impact on physical software sales than the life cycle of a platform?
Here's a chart for the sales Nintendo has made off the 3DS in Japan which includes hardware and software:
3DS Software Sales units for Japan (Counts games that have a physical and download version):
FY3/2017
Software Sales: 17.84 million units
New titles: 71
FY3/2016
Software Sales: 20.34 million units
New titles: 94
FY3/2015
Software Sales: 24.02 million units
New titles: 101
FY3/2014
Software Sales: 26.77 million units
New titles: 129
https://www.nintendo.co.jp/ir/en/library/earnings/index.html
I put up the earnings releases link so you can confirm it.
So look at that, there is a decline in new titles and software sales. What's especially telling is that FY3/2016 had almost as many titles as FY3/2015 but 4 million less software sales.
The life cycle has an affect on software sales, just because the 3DS install base is bigger doesn't mean that the whole base is active. Otherwise FY3/2017 should have been the peak of software sales, not FY3/2014 from the range of years I just picked.