If number of units sold was the only yardstick, then the industry is indeed in decline.
However, like many things, I believe that technology has changed the landscape. It is now very easy for game publishers to connect with customers, printers, designers and developers. The result is a higher number of quality games, sometimes published at ridiculously low volumes.
I have been gaming for more than 40 years. And IMHO this is absolutely the best time I can remember in terms of quality and variety and of war board games.
Much more troubling in my mind is the greying of the war board game customer base. Certainly there are younger folks playing these great games. But the new players are just a handful compared to those that are starting to enter board game Valhalla.
Sadly, there are just too many wargame estate sales on Ebay.