This is something I've been pondering for some time now. What, precisely, is hardcore gaming? Most particularly, I observe that it first became a major "Issue" when Microsoft used the term "Hardcore" to describe he Xbox Live userbase at an E3 several years ago.
At this point, I've come to the conclusion that this fanbase was not actually a hardcore group. They were a bunch of casual gamers who just played the same game (or two) a lot.
Basically, a hardcore gamer is someone who plays all kinds of games. RPGs, First Person Shooters, Plaformers, Action/Adventure, Strategy, Fighting, etc. The way Microsoft defined this "Hardcore" userbasee is inaccurate (if you ask me, anyway), as this userbase primarily just plays shooters, and not much else. This, mixed with he aging demographic of gamers, led to "hardcore" games being boiled down to gory shooters, and very little else.
So yes, casual party games may spell the end for gory shooters. But that's because casual games have a certain attraction, particularly for people like me. I used to be really into gaming, but now adays, I almost never pick up a controller without someone else being around. Part of it is a genuine lack of interest in playing most console games (because "Hardcore" became that gory first person shooter, instead of any good game with depth to it), and most of it is having a god damned life. Once you have other things to do (such has hanging out with friends and table topping, playing guitar, working, classes, etc.) gaming becomes a more boring form of entrainment. Almost all of the games directed at the "Hardcore" crowd are first person shooters that all play the same, and eventually it becomes a matter of simply ignoring such things.
The only truly satisfying game that I've experienced in a long time is Rock Band 2. It's got that difficulty, but it's also great for pick up and play by yourself and with friends. My personal opinion is that game developers need to stop trying to separate "Hardcore" from casual, because the results of interleaving the two can be pretty damn good.