The problem with PC gaming is that for the end user, the entry costs (both in knowledge and hardware) are too high. Furthermore, this is a hole the industry has dug itself into by growing too quickly and pandering to the tastes of an obsessive minority.
That's a pretty rough charge I sling at the PC gaming industry, but consider the following. The only way to keep up with the pace of PC gaming (e.g. to be on the cutting edge) is to have the latest hardware. The only cost-effective way (unless you're obscenely rich and can afford a new Dimension XPS every few months) is to build your own PC. A quick overview of what I like to call the Halo demographic, which is roughly defiend as people who took up gaming because they heard it was cool, reveals that they have little to no PC experience beyond, say, browsing the internet or typing a paper. They can buy a console which will be in good working order for three to five years and be done with it. No hassle.
Meanwhile, apparently the PC games industry has climbed an especially lofty ivory tower. System requirements on the newest games, compared to the kinds of systems you tend to see out in the world are insane. Not everybody has a l33t h4xx0r gaming rig (like I would claim that I do). Case in point: Doom 3, a game that despite the fact that everything seems to be laminated should have immense appeal. What average consumer in their right mind will buy Doom 3 if they get the slightest impression that it'll run like crap on their PC? Rather, the consumer is more likely to go buy a console shooter or platformer because they know that it's gonna work to a certain standard. When I look at my peers, I see a market ruled by the economics and security of console hardware. Not to say that PC fanatics don't exist, but they are in the overwhelmingly extreme minority.
Don't get me wrong, I love my PC and I love toying with it. However, if the PC games industry wants to survive in the face of consoles, especially these next gen. behemoths, they'll either need to push to bring hardware costs down or really push development towards making games that scale across all manner of hardware. I think there's a lot of innovation in the PC gaming industry and I'd argue that there are many genres where it's a superior platform, but I also think that the industry's putting itself at risk of being destroyed by its own hubris.