I am not too sure that gaming as a whole is beginning to die, because console releases are selling record numbers. Just take a look at New Super Mario Bros. Wii, which has sold over 10,000,000 copies, and Call of Duty: Modern Warfare 2, which has thus far produced over $1 billion worth of revenue. Gaming is far from dead. The PC gaming landscape is a bit different, though, and it worries me sometimes. When we hear of game records lately, it never has to do with the PC.
The other night, I looked at some of the upcoming releases for the PC that I'm looking forward to. These include Alien vs. Predator, Mass Effect 2, BioShock 2, Dragon Age (yeah, I know it's been out) and Battlefield: Bad Company 2. What do these five games have in common? All are available for the PC and the PS3 / Xbox 360. When that happens, it tends to mean that the games are little more than console ports. The games can indeed be developed to take advantage of the PC, but why take the time and effort to do it, when the biggest numbers are on the console?
Of the nine games being featured on the Steam homepage right now, seven of them are cross-platform, not exclusive to the PC. Ten years ago, you rarely saw a game that was available for the PC and console... today, it's overwhelming. Plus, it seems that most of the PC-exclusives today aren't commercial releases, but rather indie releases. Just pay attention to the Steam homepage; you'll see a new indie title pop up every couple of days.
I am hopeful the PC gaming situation will improve sooner than later though. After playing through Modern Warfare 2, which was nothing more than a cheap console port (despite the game being quite good graphically even so), it was a little depressing to realize that the state of PC gaming is a little iffy right now. We have incredible GPUs at our disposal, and it seems like the only way we can actually push them is by going multi-monitor or "3D".