Overall gaming industry has never been this healthy before.
The two things hurting the games industry you mentioned.
- Mass hardware issues with the XBox 360 (RRoD and DVD issues). IMO significantly hurting worry free entertainment value.
- People are tired of constantly having to check specs and upgrade their PCs to play latest games like Crysis and Assassin's Creed. Luckily for such people there are console which they can depend on to run well enough any games released for them for many years to come.