Looks like there's yet another initiative to save PC gaming making the rounds.
While I don't think PC gaming is dying necessarily, I would definitely argue that something is rotten in Denmark. Here's a few of the things I think are working well and not working well with PC gaming:
(+) Steam. Steam rocks. Yes Steam used to suck, but lately they've been doing a bang up job of making their platform stable, reliable, accessible and useful. Steam Community and Steamworks already seem much better than Microsoft's half-assed Live for Windows implementation. I wish publishers would unite behind it (fat chance I know, but it seems more and more are coming aboard).
(-) Vista. It sucks. My 8800GTX still isn't stable in Vista, DX10 or not, and that's unacceptable for PC gaming's flagship videocard. I don't think I can even name a game with which I've had a pleasant experience in Vista with. I hope they get their act together, but at this point I'm kind of hoping someone (Valve?) might create a unified development platform that would be able to play games on Intel architecture, bridging the gap between Linux, OSX and Windows so that gamers will be able to enjoy games on the PC while choosing the OS that works best for them (once again, fat chance, I know).
(+) European developers. I think they've definitely found their groove... Crysis is a solid effort (although too much of the same for me) but really what stood out for me last year was The Witcher, a refreshing take on RPGs. Definitely looking for more PC hits from the Old World such as Alan Wake, Age of Conan, and more.
(-) Bugs. They seem more prevalent than ever. Is it the publishers' fault for rushing out games for the holiday season or developers for biting off more than they can chew? I don't know, but please, a little polish would be great (and not in the form of a post-release patch).
(+) And finally the games. I want to play Spore, I want to play Starcraft 2, I want PC gaming in my life! So come'on guys, pull it together!
Is the Xbox killing PC gaming? I would actually argue against that at the moment. Yes, there are fewer big titles aimed purely at the PC audience, but the Xbox has also allowed the PC to get many of the biggest console games in a timely manner-- something that did not happen in the past. Mass Effect, Gears of War, Halo, all have come over to the PC in solid iterations.
PC gaming isn't dead. 2007 wasn't the best of years for PC gaming, but it continues on. There are certainly alot of problems and issues that need resolving and I hope the industry works together to provide a better experience, from end to end.