There is a war being waged over who controls the future of entertainment - that includes gaming, TV, movies, music, etc. That is why there have been such differing reports of "PC Gaming is dead" and "PC Gaming is huge!" over the years; it depends what aspects you are looking at.

PC gaming in the most general sense (including Bejewled, Grand Theft Auto, Frogger, Desktop Tower Defense, etc.) is collectively bigger than anything out there. The mobile gaming market is just starting to find it's feet, so for the time being PC gaming is huge. When you take a look at Triple-A titles, console gaming trumps it.

Now the important part... when you look at profit margins, profit potential and digital products for sale: consoles stomp all over PC gaming.

This is where the confusion comes from, console vendors control the sole channels of distribution for those platforms, they get paid for content to go in the channel and paid for content getting sold (going out) of the channel - not too shabby. They provide mechanisms to sell products that historically would have been boxed (full games or movies) as well as products that wouldn't otherwise exist (new clothing for your avatar). The profit potential for console-controlled publishing channels is huge, both for the vendors and the publishers. The PC entertainment market cannot offer this same story to these people which is one reason they want it to die and helps explain why some big publishers are trimming back their PC game publications... there is still money to be made, but at the same time they want to help the overall effort of trending people towards vendor locked-in console model of entertainment purchases.