Moore's law could be said to have failed in 1960 when the time scale of cost to transistor count changed from 1 year to 1 year 6 months. This time scale changed again slowing to two years. But basically no more n cubed increases in performance.
So where does this leave gaming? I believe it is in a good spot for a little while longer as graphics card exist. The reason the graphics card is important is because all hardware will now need to become task optimised. For example if I want to process a spreadsheet with billions of fields of data it would run faster on hardware designed for the problem. But in gaming we have the start of that hardware in the graphics card.
With this advantage over general business application the gaming hardware will progress faster. This will do away with the PC master race as console will become ultra optimised for the single task of gaming, With PC being general purpose they will not be able to keep up.
But this will have the same problem rather soon. When a console is released with only 0.2% increased processing power after a 4 year wait will any consumer buy it?
