Like some have mentioned, it's not dying, it's changing. Services like Steam and other digital distribution leave buying these games in a shop pointless unless you get something more with your purchase. Of course, that also leads to a weird case when it comes to pricing, since retailers obviously hate digital distribution since these services can charge so much less when they don't have to print and ship it. To avoid retail chains going up in arms they have to keep it at a level though, unless it is only available through downloads, case in point, the Half-Life 2 episodic additions.
In my view, PC gaming will survive longer than consoles. In a way the current consoles are more like PCs than they would like to admit, especially now that they actually have to patch games through their online services. Anyway, PC gaming has an edge over consoles in many genres, like FPS games (which are a failed concept on consoles, suck it Halo/GoW fanboys) and also RTS, western RPGs, and the ever expanding market of MMOs. That along with some of the most brilliant titles ever have been PC exclusive, as well as the PC gaming market advancing constantly instead of coming in "generations" featuring that obligatory "war" consisting of kiddies hooting and dick-waving every single time they launch a new set.