The problems facing the RPG genre are manyfold, imo. One of the problems, the RPG genre is having is that nearly ALL rpgs that come out today are the of the Sword & Sorcery variety. You have your magic users, you have your clerics, you have your fighthers - and all of that other stuff traditionally being associated with the D&D genre. Basically what you at the end of the in the computer rpg genre is a sort of rehash, a reworking of Baldur's Gate 1.
Don't ge me wrong now, I love BG1, but the success of BG1+2 has actually led publishers to believe that thet only can market & sell games such as BG1+BG2.
(I know you know what I mean -- you're clever and intelligent people
).
This in turn lead to more & more such Crpgs being released, from Dungeon Siege
over Neverwinter to Gothic to Oblivion to Neverwinter Nights again, (nwn2).
When publishers look at the sales figures from games that try to do it a bit differently, like Arcanum and Or Vtm: Bloodlines, they probably first look at the fact that Troika is no more. Secondly, they look at the sales and they weren't really that great, not were the initial sales for Planescape: Torment, although it now probably has sold maybe 600,000 copies.
10 years ago as with Fallout 1, you could survive as crpg making companing by selling maybe 150,000 copies of the game. Today, you need maybe to sell at 500,000 copies of the game, and best at least 1,500,000 units (copies) of the game - just to stay in business. And why? Because many more casual gamers are out there today than 10 years ago, many more games get released to day, both FPS games and RPGS (OK, mostly FPS games it seems).
In order to survive as a company making crpgs, sandbox or story driven rpgs, you'll need to draw at least some of the attention from the FPS players your way. hoping some of them will pick up your game. And that means sometimes focusing on what FPS players want more than anything: quick action combat. (or maybe rather what devs. and publishers THINK the FPS crowd wants; I'm pretty sire the FPS crowd wants a game with choice & consequence and an engaging storyline as well).
I'm NOT blamingh the FPS crowd for the demise of the CRPG genre, I'm saying that blame should dealt out to the publishers and developing houses that think that in order to sell more rpg games they need to make the rpg genre more like the FPS game. Or they need to talk about the action parts instead of the RPG parts. The most recent examples among these are Too Human, Mass Effect and Fallout 3, where all the developers have hyped their games action parts and toned down their games rpg parts. At least the Too Humans and ME players will get a surprise, of they expect the game to play out like a (traditional) FPS genre, in which you can shoot anything that moves. As for F3, well, the jury's stil out on that one, I think.
The reason why Fallout became so popular back in its day, 10 years ago, was probably due to its outstanding post apocalyptic setting which was something never seen before. (or nearly never seen?) I mean, an rpg set in a post apocalyptic world, and then an 50's sci-fi retrofuture world?? This made Fallout 1+2 unique and distinct games which, even today, make them stand out, among the other rpgs of today. Torment and Arcanum did the same thing, unfortunately they were released in 2000/2001 where big business took over the computer gaming market - and made it an industry, demanding a quick return of the invested money, even though bort Arcanum and Torment are very good & different RPGs than the RGS of today.
I miss an rpg in an unique setting as much as the next guy. I have my doubts whether or not we ever will see one being made again.