It's kinda funny to think of it, but the fact is PC gaming still is quite ahead of the consoles. While graphics and gameplay have been leveled by the lowest denominator (whitch at least means we don't have to keep buying the latest ultra super duper uber GeForce card to enjoy the visuals) the distribution is model is quite ahead.
As Aliasalpha stated, the hysteria comes from the lack of information. RockPaperShotgun guys even belive that aproximately half of the PC sales are actually digital distributions.
The biggest problem with major guys like EA and Ubisoft is that they're using a idiotic aproach to the plataform. Hyping and putting out works on consoles. Never on PCs. It's that simple. On the PC you have to think before you sell. You have to actually make memorable games.
On the other hand, no wonder the guys from Hearts of Iron 2 never considered developing for consoles. They're selling an insane amount of games on PC. And they DID say that.

Personally I'd like the next xbox to becoming a gaming PC as long as it supported mods, played PC games (probably through an emulated XP shell) & had a more open structure for peripherals.
Basically a locked core unit but with the option to add your own HDDs, joysticks etc

Every new generation of Console brings about more "PC Gaming is Dead" news. yet it never dies. Go figure.

Sure, there are tons of PCs out there, but how many of them are actually equipped to play the majority of games out there? That's why World of Warcraft sells by the shitload; everyone and their grandmother can play the game because of it's low system requirements.
Many developers focus on consoles these days because they don't have to worry about one person's 360 or PS3 being worse than another's. They're all the same, so no more optimizing for thousands of different PC configurations, and no more "ERROR 97XX PLEASE HELP" posts on their technical forums, either. Companies are liking the simple route more and more, for better or worse...

Simply put, not all PCs are used for gaming. The other day I helped set up a new laptop for a retired couple, and while it would be powerful enough for a bit of light gaming I know it won't be used for that; about the only video game the owners have ever played is Wii Tennis on the grandchildren's console. While this laptop is "gaming-capable" it isn't a factor in the PC gaming market, even for casual games like Peggle and The Sims. While PC sales far outnumber all consoles put together, the number of "active" gaming systems is only a small portion and cannot be adequately estimated.
On the console side of things, however, every unit sold will be used for gaming at some point (discounting PS3s bought as Blu-ray players and Wiis bought on a whim by non-gamers), and this means that the number of consoles sold clearly reflects the potential game sales on that system. Developers have been favouring the 360 lately, partly because of the user-friendly development kit but also because the 360 has simply been selling better than the PS3; statistically, a PS3 version of any given game will theoretically sell fewer copies than the 360 version. This simple percentage isn't viable with the PC, especially when many games require modern hardware and therefore can't run on Intel GMA-based laptops and other low-end systems.
I have serious doubts that it could be achieved.
The hardest part would be incorporating backwards compatibility with the 360. The 360 uses a PowerPC CPU, but Windows only supports the x86 architecture; translating PowerPC requests to an x86 CPU in real time would be a difficult task, but so would porting even a simplified Windows core to PowerPC and emulating x86 software on top of that. Backwards compatibility was imperfect on the 360 as it was, and people would be very unhappy if the next system simply wasn't backwards compatible at all. While the ability to run the Windows versions would satisfy some people, there are a large number of popular 360 titles that never got a PC release.
Unless it also ran its own game format, there would also be some problems getting developers to properly optimise for different hardware combinations; with the 360 the only unknown variable is the hard drive, but if games were to also be compatible with normal PCs they would need to do a lot more testing. There would also be a number of technical problems when running games that are older or not intentionally made compatible.

They could always do hardware backwards compatibility - just include the old hardware in the new machine. That's what they did with the PS2 and the early releases of the PS3 as far as I recall.

A few months ago I would have agreed with this statement.
For sure, companies focus on console gaming, so gaming in general has been watered down (e.g., System Shock 2 to Bioshock is a great representation of this), progress has dramatically retarded, especially in the last two generations (I kind of view Microsoft's dive into the industry as what started it...but it's probably just because I hate Microsoft). But PC gaming itself is picking up. It'll never die as the standard for RTS and MMORPGs (OR WILL IT???!?!?!?). Many companies are turning their games into Steam products as the best form of DRM to combat piracy, and it looks like it'll work pretty decently. Once this really picks up, PC gaming will start picking up, fo' sho. Or at least a little, since the majority of games will still be console ports.
And GTA 4 (on PC) was dog shit. Rockstar are punks for doing that to their customers, providing the worst excuses possible.

That is really a false argument that I am sure the game developers are following. Whether or not a PC is likely to be used for gaming is really moot when you look at the sheer numbers of PCs that are in the market, plus the fact that every PC owner survey that has ever been done indicates that 75-80% of all PC owners do use their PC for some type of gaming, even if it is what has come to be known as "casual gaming". Those numbers should be enough to make them realize that there is just as much, if not much more money to be made from PC gaming as there is in console gaming, but for some reason it has not. As for the hardware limitations argument, see below...
Individual hardware compatibility used to be a problem in the days before DirectX and OpenGL, but that is really no longer the case. Games just have to be made compatible with whatever API they are designed to run on and then it is up to the consumer to ensure that their hardware is up to the standards of that API. That being said, one of the major problems with this is developers keep trying to make games that push those APIs to their hardware limits, rather than making games that will run well on the most common hardware that is compatible with that API, thus forcing PC gamers to continually upgrade in order to get the most out of their PC games (or in some cases, simply to play the game in the first place). If they spent as much time on developing decent gameplay and story as they spent trying to squeeze uber graphical performance into a game, PC gaming would still rule over consoles easily. Even a crappy Intel integrated graphics chip is capable enough to produce acceptable graphical quality, if the game were made to actually work with it. So if PC gaming is really dying, I think a large portion of the blame lies with the game industry that isn't developing games in a way that will appeal to or even function on the broader PC market.

Are we discussing this again? This is all a matter of the industry maturing and evolving. Instead of just stating the same old trite statement, people should be more specific in analyzing what they truly mean.
What is happening more often these days is the development of simpler games that are designed with the console in mind and then being ported over to the PC system that is capable of greater complexity. But the problem isn't that games are not being made for the physical PC system anymore, the problem is that developers are simply not making games of a certain style or genre.
It's all about trends and natural maturation of the medium. Would you say that classical music is dead? Certainly mainstream pop music is more popular in society today. But classical music will always have its place. Just as more casual games can coexist with the deeper more hardcore games.
If people are so worried about a certain type of genre dying out, instead of posting stupid threads complaining about it, they should get involved with the development side. It's easy to bitch and moan while standing at the sidelines, but in the end the gaming industry is a business where you have to balance the financial aspects along with the artistic integrity. As cool as it may be to make the most hardest of hardcore game for really devoted fans, programmers and artists need to eat too.

Short Answer: no.

Ha! Major publishers and developers can go to hell and make room for some fresh air, indie that is :D

Long Answer: no.

I wouldn't mind playing nothing but Introversion games.

if they made games just a little faster, they would be perfect :-).

Hey. CD-Projekt!
You guys are in PC business almost 15 years now (may is the month. Congratulations btw)
Can you share some opinions on that matter? can be unofficial, just personal opinions.