The HDTV is not be big cost factor (you don't need one to play these games anyway). The overuse of DLC and overexploitation of franchises is. Look at Guitar Hero, for example, that got overexploited and is dying. Activision puts more teams on CoD to exploit it more, while it may go up for a game or two (though it's likely that MW2 is the peak) expect a drop too.
This happens all the time, though. 3D platformers were all the rage in the days of the N64, and then everybody got sick of them and the genre died. It also happened to side-scrolling platformers and shooters in the 16-bit era...people got sick of them, tastes and technology changed, and those genres were relegated to the fringe. The same thing has happened to JRPGs, which had their heyday on the PS1 and PS2, and are now on the cultural back-burner. When interest wanes in one genre, another genre rises up to take its place. Music games have had their day in the sun, they've reached their zenith in popularity, and now they'll be put on the back burner. The same thing will happen to Motion Control games. It's all cyclical. To say the industry overall is doomed because of what's happening to one particular genre or franchise is a complete overexaggeration.
More importantly the aging population means fewer people enter the demographic core games are aimed at than leave it. There's little effort put into expanding the appeal of core games beyond that demographic. The development of the demographics is pretty predictable (one year's 15 year olds are the next year's 16 year olds) so the decline can be predicted already. Gaming has followed the population growth for the last two decades, the core market grew with the population and will shrink with it. While gaming as a whole will never die the console game industry just might.
I think the CONSOLE game industry's days are numbered, but that's not based on demographics (it's based on technology, and the console eventually becoming outdated as a game delivery mechanism). You're discounting the fact that the core demographic will probably EXPAND with an aging population. Do you think that hardcore gamers will look at their watch and suddenly say, "Oh! I just turned 40, I guess I can't play Modern Warfare 2 anymore, I have to start playing Minesweeper and Solitaire...I would play Peggle but I suddenly can't grasp its complex control scheme." It doesn't work that way. If you're a hardcore gamer at 20, you'll be a gamer at 30, 40, and beyond. My gaming tastes will not change when I'm 50...the only thing that will change is the amount of time I have to devote to games, if anything. I'll become more selective in my purchases, but I'll still be buying stuff like Uncharted 2 and playing MMORPGs. Plenty of other people I know will be doing the same thing...they'll be buying games to play with their kids, but they'll also be buying games for adults too.
How can you be so certain of that? Last I checked Wii sales are very concentrated on specific games which suggests the buying patterns are not random but informed, the sales rise fairly slowly after release as the biggest advertising to these people is via word of mouth (and games like Carnival Games sold because people were happy with their purchase and suggested it to others).
Your assumption that these purchases are informed is just that - an assumption. Wow, people buy Mario games and Wii Fit. How informed does somebody need to be to buy those games? Everybody knows those franchises, or has seen them profiled in USA Today. Muramasa selling through the roof would be an informed buying decision. Would you consider somebody buying Halo 3 if they owned a 360 an "informed" buying decision? I wouldn't. That game was advertised with McDonald's Happy Meals.
On the other hand, core games are hyped to high heaven, sell a ton for a week and then quickly fade into obscurity. It's happened plenty of times that core gamers got duped into buying garbage through hype (the example of Enter The Matrix will forever ring in my mind) and there's plenty of bribery going on to distort previews and reviews so that what we are informed about is just what the marketers want us to know.
I don't know, I'd hardly say that games like Grand Theft Auto IV and Call of Duty 4 "fade into obscurity". If anything, they keep selling thanks to price drops. Call of Duty 4: Game of the Year Edition for PS3 was a deal on Amazon yesterday for $25, and guess what? It sold out no problem. These games keep selling, because they become known in the hardcore community. Furthermore, hardcore gamers are the tastemakers - casuals come to THEM to find out what they should buy. A friend of mine asked me about Uncharted 2 the other day because he wasn't sure about it, and I told him it was amazing. He bought it and he loves it. Don't think that hardcore gamers are this elite cadre of people that don't talk to casual gamers...it couldn't be further from the truth. If anything, they use their expertise to recommend "hardcore" titles to casuals, and set trends simply by letting people know what they're playing.