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The applications sell the platform. I don't see anything today that will keep selling the Windows-PC to the masses. I can certainly imagine things which could, but the post-Bill-Gates-MS don't allow that to happen. They're too busy trying to redo exactly what others already have done, and to try to matter on these other markets.
It could go either way, depending on where the critical mass of consumers falls. Look at Windows 8 as a case study--the OS was released with the apparent assumption that everyone was moving to a tablet interface, and that the desktop machine was no longer relevant. The user base, however, rebelled. Despite some real improvements under the hood, the OS was as popular as VD because of the rotten UI, and rumor has it that Win9 will restore full KB+M support.
One of the keys to the future of the desktop PC is the issue of user ownership and control. Despite Microsoft's best efforts to market the X Box as a fully integrated home entertainment appliance, there will always be some who reject it because it is a closed system. You buy the thing, and then you can use it only in the ways Microsoft permits you to. You don't have direct control over applications, the file system, networking, etc. without hacking it, which renders it useless as an online gaming platform anyway. A comparably priced home theater PC gives you all the ownership and control you could want. The ease of system building with plug-and-play components means that generations who grew up in the PC era buy desktop machines as a convenience, but those prices can't creep up too far or too fast before those customers just start buying the parts from Newegg and putting them together like a dresser from Ikea.
I wonder sometimes if part of the reason developers increasingly seem to focus on the console market is because it's easier for them. You give a console gamer an 8 slot limitation, they play the game with 8 slots. You give the same limitation to a PC gamer, they head to Google to look for a mod to fix it. We tend to have the attitude that we own the game and the other software on our machine, and your TOS and EULA apply only as far as you can enforce them. We tend to think of games as products, not services, and act accordingly.
I think the future of the desktop PC as a gaming platform is going to depend on the future of that attitude, and the degree to which it penetrates through generations coming of age in the next decade.