You're defining "audience" narrowly towards single games and single genres as "new audiences," the MGS audience and FF audience, the "arcade gamer". Tomb Raider was developed and designed towards the same audience as Resident Evil as Madden as Need For Speed.
I'm defining the existing audience as the people who already own a console. New audiences are people who don't own the console. The likes of FF sold to some of the existing audience, but they also attracted new audiences. The existing and new audiences are often in a similar demographic but that is not necessarily the case. The initial PSX audience was proven to like arcade games like Ridge Racer and Tekken, they were not proven to like slower paced games with storylines and characters like FF or single player adventures like Tomb Raider. They were also not proven to like games like DDR or Bishi Bashi Special.
Just as the Game Party was developed for the same market segments as Sports Active as Just Dance as Deca Sports.
Yeah, and these games did a weak job of it in comparison to the likes of FFVII, Madden, MGS, RE and Tomb Raider which all sold multiple millions and were able to retain a large audience in the future. The Wii games also failed to provide variation compared to PSX IPs which offered a greater diversity from the initial hits. When a customer averages buying 9 games per console a one dimensional library is not the order of the day.
Once again, based on what exactly? And on whose dimensions of quality? Yours, apparently.
Once again, otherwise word of mouth would have led to major hits and there would have been greater audience retention.
Again on what basis whatsoever are you deriving that "genre diversity" is what that consumer segment wanted. Because they've clearly migrated to mobile for the genre diversity of runners, quiz games, match three, that they couldn't get on consoles?
That's an unsubstantiated assumption that they chose to migrate to mobile gaming. As for "genre diversity", 100M is a diverse audience and will have a diversity of tastes and interests. The human brain is wired to like new experiences and gets bored with excessive repetition. Seeing as the videogame industry is part of the entertainment industry and seeks to alleviate boredom, by definition diversity is what the consumer segment wants.