Jesus, i'm not gonna go make 20 quotes for each point and etc, i'm only gonna say this:
It's been the subject of countless articles, lectures, comments, etc. The PC having to re-evaluate it's model and transitioning to a digital model is precisely because the consoles were kicking it's ass at retail, this is easily seen on all format retail charts everywhere.
The industry reports are showing MMO growth, not retail growth. Furthermore, 99% of those MMOs are PC exclusive. I'd also go as far as , judging from the usual PC charts, a ton of PC sales are from MMOs, Blizzard games, and The Sims, there's been entire years that a new title enters the charts for a month, and disappears, and WoW/Warcraft/The Sims/Starcraft/Spore makes up the rest of the charts for all eternity (lol).
PC games have a higher margin, but also sell for much less, like I said and you ignored they get discounted heavily early on, much earlier than consoles titles, which are already more expensive by default, so it cancels out the higher margin. The success of Steam is because of dirt cheap prices, they might sell but they yeld lower revenue.
Word of mouth is equally important, if I don't judge the state of gaming from everyone I know, i'm just reading stuff off the web without judging it first hand. They actually agree, like I said and again you seemed to have ignored, my friends pay for MMOs, everything else they either pirate or buy a console. That just confirms the current PC sales trends. The truth is PC retail is skewed by 4-6 insanely evergreen titles like WoW or The Sims, while DD isn't big enough yet.
I also work in the industry and know what people talk, what I hear. It really depends on what you're talking about, if you're talking about casual EA or Blizzard, then yeah they sell tons. Everything else? Not so much. Heck, everyone likes to say MMOs are huge, when WoW is half of the entire MMO space.
Finally, I really, really wish people stopped with the Steam excuse. Yes, DD is growing, Steam is growing. It's also not the second coming of christ and is still dwarfed by retail.
PC is in transition, but there's zero doubt that it lost ground in areas it was strong in, and is currently redefining itself with DD. Consoles have become huge and sell to both former PC guys, and newer gamers who can't or won't game on PC.







