I play a lot of games alone personally, but generally I like some form of local multiplayer when reasonable. It's always disappointing for a friend to come by and see something cool you're playing, and they want to play with you, but they can't. I don't think I'm the only one who feels the way, look at some of the best selling 360 games. Gears, Halo 3, CoD 4. They all have split screen. One of the annoying things about online play is every player will need a copy of the game. So from a cost perspective, split screen adds more value to a game then online play, at least for me. The three games I mentioned above have both local and online play, and that's probably part of the reason they have sold so well.
One of my cousins loves Halo 3 because he can play it with three other friends, and against people online, all at the same time. I don't personally care for Halo 3, but I can't deny it's wealth of play options gives it a lot of value for a lot of people. Once I was playing Gears, and one of my sister's friends came over. He found out she wasn't here, saw what I was doing, wanted to join in. And he could, just like that, and then an hour later had to leave, and the game just let's the CPU player take control again.
I’m not keen on most online play because it’s very heavily slanted towards overly competitive players who typically dominate the game constantly, making it little fun to actually play unless you’re one of them. I liked Team Fortress 2 because of the class diversity helped put emphasis on many playing styles, allowing you to probably find at least one thing you’ll do good at. And I like Star Wars Galaxies for it’s many hugely developed Crafting and Entertaining professions that stood shoulder to shoulder with combat professions. (Until SOE destroyed them because they wanted to copy WoW.) Aside from that my online play is usually with my cousin who lives a town over, and then only if we both have the same game.
Local multiplayer doesn't always have to be split screen though. Super Mario Galaxy helped to spearhead what I like to call "Passive co-op". In Mario Galaxy, only one person can play as Mario, but a second player can turn on a remote and control a second cursor and can contribute to the game. When I first got Galaxy, me and my sister actually played a lot of the game like that together, and it was surprising how much the second player can actually do. The second cursor has a special attack that can hold enemies in place, which is great for destroying those rolling boulders. (Something Mario can't do without a star.) They can hold green shrinking platforms and stop them from disappearing. Freeze projectiles making it easier for Mario to hit them or avoid them. And of course collect and shoot star bits, something the Mario player may not be able to concentrate on.
Some other games have this kind of drop-in/drop-out passive game play as well. Lost Winds has the a similar set-up, except the second cursor actually has all the same powers as the first player's cursor, which can help make the game easier when working together. World of Goo let's up to four players all play the same puzzle. Zack and Wiki let up to three other players draw on the screen with the remote so people can highlight what they want you to try next. I think even CoD 5 Wii let's a second player shoot on the same screen, almost like the first player is playing an FPS and the second player is on a rail shooter.
These kind of subtle co-op elements are great ways to allow more people to play the same game without either changing the game entirely, or making an entirely new mode for it. Nintendo actually tinkered with this kind of concept in The Windwaker with the Tingle Tuner. One player would play the game, the other could hook up a GBA and control a cursor that tingle controlled. And you can point things out, bomb enemies, or immediately restock your first player's health from Tingle's personal set of items. My biggest disappoint with the Wii is it has almost no games that also use the DS. I figured since they’re both Wireless and the DS sells assloads, we’d see some more Wii games that have options to use the DS in a fun way. But it looks like the remote itself can often add this kind of gameplay in a less obtrusive way, so I'm pretty content actually.
Online's number are probably rising faster because local multiplayer has been a part of consoles for a long time, where has online play on them is gettnig it's biggest pushes ever this generation and is probably new for some people not connected to Pc gaming scene. I doubt local multi-player is any major danger though, espeically when like I said, some of the very best selling 360 games all support it and online play.
