As for expanding the audience, I would argue that as video games become more socially acceptable, more money will be brought in for publishers allowing for more quality "core" games.
This may not happen in a year or two, it may take awhile because Nintendo is focused on keeping their Blue Ocean market, but it will occur when we see the 3DS have more quality 3rd party support than the Wii. Fact is, publishers like any other business invest in profitable product lines and most of the time, the most profitable product lines are those that appeal to the widest possible consumer base.
RPG, FPS, Racing, Real Time Strategy, and other niche video game genres cater to a very specific, limited consumer base. Hence, unless you are a company like Bioware or Blizzard, it would not make sense to create those niche genre games unless you have a heavily anticipated and heavily preordered blockbuster on your hands.Thusforth, companies like Nintendo will cater to the Blue Ocean market from 2005 on for 5 or more years to get them established, then they will reinvest the profits from the "casual" titles into contracts with quality 3rd party developers.
Casuals will be catered to more and longer in the future because of their sheer size and wallet strength. Some of us may not like, some of us may absolutely hate it, some of us may see it for what it as a good business decision, but in the end we all benefit from video game companies having more profit to fund far-fetched niche projects.
