No, gaming audience has grown, with gamers aged in there 30s and 40s now downwards, there isn't just a sole demand for games for children then in the past. So Iconic Characters associated with games isn't needed but also gaming has evolved from the play as a character defined by the developer to more of a character that you put your face onto and become. Basically Developers are aiming for a character that is a blank slate for you be be like in RPG's, tho you still get your characters in game.
Tho you never know, while gamers are getting older, doesn't mean that kids aren't playing games. A Developer might make the new iconic character to go with a console. But since its the working class older gamers with the largest of disposable income, publishers and developers want to make games for the bigger richer market.
So more than likely we will see a decline like what we have now in kids games as Gaming becomes more adult entertainment, which will in turn be bad for the kiddies, but good for the older games as more sensitive/adult themes will be explored more, creating more meaningful rich experiences. Tho as long as Nintendo is around there will be kiddy games, tho Nintendo have no intentions creating new characters or ips and rather bleed the ones they already have some more.
Of Course That's Just My Opinion, I Could Be Wrong
