I used to have an AMD Athlon 3000+ from like 2005 along with a video card from around the same time. The only thing I needed to be able to play Mass Effect at a better setting than Xb360 runs it at (20% higher res and more antialiasing), was an 8800 GT, which I got for 120 dollars. Btw, my CPU was a bottleneck with this setup :p, but I later got a 4000+ single core, and then a 4200+ dual core for really cheaps :p. These are still pretty old CPUs though, so my point still stands. I can even play Crysis (on low)!
If you have a PC that isn't older than 4 years, you can bump its graphics capability to near or better than the current gen consoles for less than half the cost of a new console, so I don't think the price of PC capable of running new games is an issue, but maybe installing a 3D card on your own is.
As for the PC vs console gaming debate, I think it depends entirely on what kind of game you're playing. I think some genres work way better on PC than on console, and vice versa. Competitive FPS gaming for instance, is definitely in the realm of the mouse and keyboard, same with RTS games. What I think consoles have got over PC is where they are usually located. A PC is often located for example at the work desk you've got at home, or some other isolated room, at least mine is. My console however, is hooked up to my TV in my living room, a much nicer environment to be playing games in. Of course you can connect your PC to your TV, but most people don't do that, for example if they only have one computer, and they don't want to do all the other stuff on their TV as well. The PC is a multipurpose computer, and many of the things you do on it are impractical to do on a TV.
The ease of piracy on a PC is probably a problem too. It might not be as big a problem as some claim it to be, but it is definitely much bigger than on console games. The game developers then have two options: Make a console game that won't be pirated very much, or make a PC game that will be pirated 30% more than if it was on a console. Guess which is gonna earn them more money.
Btw I really hate it when games are ported to PC, and the controls aren't optimized for it. I'm looking at you, FFXI!
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