Gamming won't die - it suffered a crash in the early 80's, and Nintendo arrived to pick up the ball and run with it. One can also argue that sega master system and then genesis kept things competitive - no need to get into the 'bit wars' and 'console wars' all over again.
The point is, someone will take up the ball and run with it while everyone else picks up their ball and goes home. The issue is of course the clash of the types of gamers out there.
1. There is the growing up youth, children or teens who love those flashy graphics, achievements, online competitions - there's little or no effort being put into plot, it's about "what will this offer online?" so a large budget is always in place for that.
2. There is the gamers of today who were the games of the early 80's, who grew up with colecovision, intelevision, commodore 64, and Atari. These gamers saw how things evolved and now got "addicted" to 'bigger and better', who just want things to look nicer and nicer and are in par with the 'online gamers'.
3. There is also the game that is part of category 2, but who is growing very bored with the current 'rush for realism and graphics'. These gamers play more and more retro games, to capture first their youth and secondly the depth of which games had placed them in. The original fallout with multiple paths and where choices meant something, 7th guest and 11th hour, where puzzles felt rewarding for completing them but the game wasn't outright impossible, etc etc..
4. There are the gamers of the youth today, preteen or early teen, who are growing bored with continual sequels and re-releases and who want something 'new'. The thing about that, is this group is in par with group 3. Group 3 can show group 2 old retro games of in depth and these gamers want games to look nice but have this type of depth as well.
I fall into category 3; don't give any care about Halo, Halflife, Call of Duty, Guitar Hero, smash bros. These games just bore me to death - I am still playing Warlord Battlecry 3, Battle Realms, Shadowrun, and Secret of Mana.
My roommate owns the Wii and the X-box 360, of which some games he has for them I play and just think, "this is cookie-cutter, carbon copy of 'that' game, which is likewise the same for 'the other' game" (as I point to each title consecutively).
I won't buy any of the 7th gen consoles because graphics do not impress me. True, resolution does, but looking "real" isn't as important as feeling "good".