“Is the video game industry dying?”

My father asked me this today, not out of personal curiosity but because he was reading an article from CNBC’s Chris Morris headed with that question.

My answer: “Define dying.”

Morris is hearing a swan song rising from the gaming industry, signaled by the quiet reserve and seeming denial of looming disaster surrounding this week’s annual Electronic Entertainment Expo (E3). He’s not alone; one need not look long to find a bevy of harbingers, some lamenting the imminent Death Of Gaming and some gleefully waiting for babel’s tower to fall. Whether for good or ill, they all have this in common: they see the end as nigh.

The prophecy comes in the form of flagging sales numbers, shocking mismanagement, and a torrent of news that people who used to be making video games are cleaning out their desks and joining the unemployment line. Optimism finds itself in short supply and, if the town crier has it right, comes coupled with delusion. The light at the end of the tunnel’s a mirage, and those who see anything other than doom on the horizon are only kidding themselves.

I’ll be honest: something is dying. Whatever the industry once was has seen its good days and is now rapidly, impressively eroding. But old selves are put off to make way for new ones, and I can’t help but think that what others see as a swan is really just a phoenix, preparing for rebirth.

Morris ties the glory days of gaming almost exclusively to Nintendo’s success with its Wii console, a point not lacking in irony for most who, prior to the Wii’s release, would have counted themselves “gamers.” While the system undeniably did provide a gaming experience to an extremely diverse new crowd of people, it seems improper to say the Wii actually grew or converted “gamers.”

While the word “game” has meant many things over time, it spent a couple decades meaning something special, self-contained, and set apart from mainstream culture. People who casually dabbled in arcade fare were no more considered gamers than those who routinely played Monopoly or Scrabble — games, too, but of a different stripe. Gamers defined themselves based on passion, commitment to the medium and the experiences it offered that had never been made available before. Gaming was not merely an activity, it was a culture.

And while my grandfather, for example, began to play games on the Wii, he never entered that culture. Nor did, I daresay, almost any of the people whose only real “gaming” experience has been the casual, the party, the glorified karaoke and air guitar offerings which turned the Wii into the worldwide money-drinking phenomenon that it was.

The Wii didn’t change people’s minds to fit games. It offered games to fit people’s minds.

Not that that really mattered from a financial standpoint. On the business side of things, Nintendo really did revitalize the industry, bringing in millions of dollars that had long been circulated in the coffers of other entertainment endeavors. And for a while, we thrived. Each E3 seemed more incredible than the next, the promise limitless, the future wide open.

But as the economy began to wane, so too did the profits, and the horizon began to dim. To some extent the year-over-year decline in sales is merely the inevitable result of non-industry-related realities: people working less or earning less and thus spending less.

Unfortunately, the costs of gaming have not demonstrated ideal elasticity. Bolstered by increasing revenue, budgets for games have risen to staggering heights, leaving little room for price cuts to pass on to consumers. And those consumers, who have less money to spend, simply can’t justify buying the way they were four or five years ago. It’s not that good games haven’t been coming out; it’s just that people can’t buy them.

Or perhaps it’s simply that they don’t want to anymore.

The reason that Nintendo’s success was so huge is in large part due to how much a Wii, its myriad peripherals, and gaming software cost. Each new “gamer” brought in on that bandwagon invested hundreds of dollars for a single Wii Fit or Wii Play experience; a rather expensive setup if the intention is merely socializing with friends and family in the context of a game. Indeed, there’s nothing particularly casual about all that money.

And yet, “casual” is the experience that people were flocking to: games that didn’t require much thought or analysis or time from the player, and thus games that didn’t offer much depth or impact as a result. Nintendo mastered the delivery of such games, and for a while everyone and her mother played video games.

Whether the advent of the Wii was truly the pinnacle of the industry really depends on who you’re asking. A Nintendo investor would no doubt heartily agree, lamenting the recent exodus to the likes of Zynga and Rovio. But if you’re talking to anyone whose fondest Nintendo memories stem back to, say, the SNES, you’ll hear a different story.

Nintendo’s fans — that is to say, that aforementioned culture of “gamers” — got utterly shafted for the majority of the Wii’s long life cycle. While Nintendo did eke out one or two strong games a year (to much rejoicing), the company’s focus completely changed, leaving those who’d spent a decade living in the house that Mario built out of the picture.

Such might say that the Wii was the worst thing to ever happen to gaming.

And in that case, the declining sales may be a beacon of hope for things to return to what they were: a small family gathering without all those crazy relatives; an industry once more inhabited exclusively by people who understand what makes gaming — as a unique entity — great.

For one tending towards this view, the casual wave brought about by the Wii was an unnatural, and ultimately unsustainable high from which the current decline is not only inevitable but healthy.

Meanwhile, the industry has a chance — and perhaps its last — to learn something about itself. The last few years have seen an increase not only in mobile and social gaming’s scale, but also in quality: quality which has begun to rival some console-based experiences without demanding the consoles’ forbidding prices.

If blockbuster-level games with astronomical development costs are losing the economic battle with 99-cent iPhone time-killers, it’s merely a sign that the industry needs to change. Smaller, well-polished games available for reasonable prices should become the rule rather than the exception.

That’s doubly true as the industry moves to combat piracy and diminish secondhand sales, because games which could once be lent or borrowed by close friends (or even experienced equally by multiple members of a single household) are now being converted into single-use commodities without any tangible decrease in cost to offset the decrease in value.

From every corner of the globe you hear people saying “gaming has become too expensive.” If the industry wants to survive, it has to start listening to those voices, either by passing along the savings that digital distribution generates, or by lessening budgets to offset decreased retail pricing.

If the industry gets smart, encourages creativity rather than stifling innovation, listens to its faithful consumers instead of grabbing for a casual audience that’s already abandoned it, then I see no reason why we can’t return once more to the real glory days — the pre-Wii days when people who played games cared about games and not just diversions and when people who made games cared about craft and not just profit.

But if not…if this year we see more casual pandering, more bloated sequels, more anti-consumer programs masquerading as intellectual property protection, more devaluation without compensation, then I’m afraid the video game industry isn’t merely dying; it’s already dead.