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As graphics cards became increasingly powerful, it became less and less practical to write games that would take advantage of the hardware without requiring it. Inevitably the ad-hoc PC platform was riven into the accelerated and the un-accelerated. Suddenly it was possible to buy a brand new computer that wasn't capable of running games. Suddenly buying a graphics card was a requirement just to get in the door. At the same time, the graphics card market began to grow more byzantine. No longer were we shopping for a Voodoo 3, Voodoo 4 or Voodoo 5. Now we were shopping for specific chipsets, which were balkanized into sub-markets by memory loadouts and slot interfaces, and then further divided by vendors and brand names. Sure, there will always be people willing to do their homework at Tom's Hardware, sink $200 into the latest pixel-accelerating toaster oven, pop open their computer and muck about installing the thing. But the number of people up for that sort of puzzle-solving will always be less than the number of people who got a computer because they needed something to plug the printer into, but who wouldn't mind playing some games in the evening.
The sad thing is, I don't see how this could have been averted. What was NVIDIA going to do, not sell graphics cards? Should gamers have not bought them? Should developers have just ignored the advanced hardware? Everyone acted rationally. Everyone moved forward because they wanted the PC to prosper. And yet, the changes they brought about ended up building a wall around PC gaming.
Although, it might have mitigated the problem if integrated graphics cards didn't suck quite as bad as they do. Those built-in graphics cards on new PCs are shamefully useless. The Amish could whittle a more impressive GPU from driftwood than what comes prepackaged in the standard-issue new PC. It's not that they run games slowly, or that games look bad - it's that they usually can't run new games at all. (And remember where we began: In the '90s, new computers could run new games.) If the average integrated GPU was up to the job of running new games (albeit poorly), then the PC could still be an onramp to gaming.
Imagine how huge the Xbox 360 would be if it was as common as the personal computer. If there were classrooms full of them in every school, and you could use them for free in every internet cafe and library. This was what the world looked like for PC gamers before graphics acceleration created a distinction between "computers that can run games" and "regular computers." PC enthusiasts - a group which includes me - often point out the openness of the hardware, the better resolution or the mouse and keyboard interface as the strengths of the platform. But none of those were the real reason PC gaming was so big for so long. The real reason PCs reigned was because everybody had one.
Nothing "killed" PC gaming. It just stopped being the all-encompassing omni-platform of ubiquity, and now sits around the retirement home drooling on itself and muttering about the good old days.