CrashToOverride: The whole problem with the PC market now is the prices. While it takes close to a thousand dollars for a low-mid range gaming rig, and well over 1000 dollars for a mid-top range system, its only 250-400 bucks for a gaming console.
Yes and no. Consoles always had that price advantage. But you never could do much more with them or at least, a lot less then with a PC.
And let's not forget about the PC's advantages. Playing Dragon Age, Oblivion or Fallout 3 on a console can never be that good as on a PC - you simply lack the mods.
Then there's backward compatibility. About every game sold here on GOG.... even with re-release of old 16bit console classics now, you'll never have that back catalog on a console.
While moving I recently dusted of my old Dreamcast and hooked it up. Guess what? Of course all batteries on my memory cards where dead. No saving - happy gaming. It quickly vanished back into that box again and the next 3 hours I had fun tinkering around with some Morrowind-mods.
In short: what you gain on price for a console, you loose on flexibility. For a lot of gamers this may be a budget decision. But there will always be a market for the gamers who cherish that flexibility and developers willing to produce for that segment.