First of all, the confusion over the term "casual" is because the word itself is an attempt to "niche-ize" certain games that are successful because they DON'T play to a niche.
Games like Cooking Mama, Imagine, or even Guitar Hero are called "casual" because they are short sessions games, but they play to highly specific audiences--niches.
But games like Brain Age, the Sims and Wii Sports don't play to any particular audience. Nintendo markets Brain Age to 30s-50s males (or their kids) with a Father's Day DS bundle, and then turns around and markets it to teens and 20s females with the "I Play for Me" campaign.
Second, install base is not a good reason for FF, GT or MGS to sell less on PS3. Beyond a point where the past sales only represent a 25 or 30% attach rate, it doesn't matter.
Ocarina was the best-selling Zelda.
Melee outsold SSB.
Mario Kart DS has blown by Mario Kart Advance with a still smaller install base.
Call of Duty 4 has crushed what COD3 did across way more platforms.
If the series can keep exciting people, it will sell into a smaller base very well.
The thing that makes the higher-selling systems sell so much in the first place is the huge variety of software, which will mean lower attach rates for individual games. When the variety of software disappears so do the hardware sales, but the top titles aren't directly hurt.
"[Our former customers] are unable to find software which they WANT to play."
"The way to solve this problem lies in how to communicate what kind of games [they CAN play]."
Satoru Iwata, Nintendo President. Only slightly paraphrased.
