I keep wondering, is it really that the PC market is shrinking or is it just that the console market is exploding? I'd actually be willing to bet that the PC market is even bigger than it was five years ago, just nowhere near how much bigger the console market has become.
I'd be happy to switch over to consoles, and I've been playing exclusively PC games since 1990, but only if the sort of games I'm interested in were developed for them. The problem is that I tend to prefer niche games and it costs too much to develop for consoles.
My favorite game right now (Evochron) was developed by one guy in his spare time. That would never happen on a console. It seems like unless you can sell a couple hundred-thousand copies minimum, there is no point in developing console games.
One of the ironic things about this is that we were having the same argument in the early nineties when the "16-bit" consoles were released and it was id with Wolf3D that showed action games could be better on the PC. It was also id, with their early support of 3D-accelerators with glQuake, that showed 3D games were better on the PC than the next generation of consoles.
Now, we've got WoW that's showing how much better PC games are for online play with MMOGs, but I ****** hate role playing games.