Nintendo is making as many top notch hardcore games as they ever have. Third parties are giving lots and lots of support to the DS, and flocking to the Wii. The fact that there are lots of casual games doesn't diminish the fact that there are lots of non-casual games either.
I honestly don't see much of a distinction anyway. I play loads of Roguelikes, strategic simulations etc on the PC, and console games have always seemed casual in comparison. Are Halo 3, Resistance, God of War, and SSBB hardcore games? In the end they're all button mashers that require 5 seconds of an attention span, and give immediate gratification to the neurotic gamer. They're also very fun, buy in a different way to more complicated games.
Then again, I don't belong to the crowd that defines casual games as "games I don't like", so my definition probably isn't the most common one.
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