It's true that the progress in games is much slower now, but I believe in the console world the main factor is hardware.
Consoles used to have very bespoke architectures, but now are switching to customized versions of relatively off-the-shelf components. Both the PS5 and the last XBox use x86 AMD CPU+GPU combos, probably a variation of their regular G product line.
This results in better games with more content, and every game releasing on every platform.
The games on the Wii might have been super novel, and innovative, but most of them were kind of junk that wouldn't pass today. Now most new games seem to come with 100+ hours of content and extremely polished gameplay. Rather than building 4 games for 4 platforms, you can spend 4x more to develop one game.