Eh? The majority of gamers couldnt care less about the online service, and certainly not enough to pay for it.
What MS have done is corner the hardcore market, and its those gamers who place a strong emphasis on Live!
Pachters predictions are based on what he thinks will happen at the time of year when console sales are high. During Q1 they are low.
I think the whole concept of a "hardcore" gamer is dubious at best, I own a PS3, Xbox 360, the DS and soon as it is possible to walk in and actually buy a Wii I will own one of those too. However I am not big fan of shooters in fact I don't have a Live gold account and I have only been on PSN with RFOM one time. I have decent amount of money on games on all of the platforms I own and in my mind I am certainly an avid if not hardcore gamer however since my gaming activity doesn't center around Live and online deathmatch I might not be considered 'hardcore' at least according to what you are outlining as the whole Xbox 360 library in my opinion is lacking in many areas while in other areas it provides exactly what I am looking for.
To me the whole appeal of Live and the Wii is much more simple than hardcore versus casual, there is simply a natural evolution occuring in gaming - the human to human interaction while cooperatively engaging in an activity is infinitly more compelling than traditional person and computer game interaction we have had for the past so many years. It really has nothing to do with shooting each other or engaging in a mini game it is the talking, competition, developing a persona, societial norms; in other words the human exchange which makes the whole thing stimulating.
And if you think about it this is no different than the paradigm shift that computing went thru over the past 15 years with the advent of the internet. There were always those who would find interacting with a computer interesting but when you add email, websites, i.e. easier interface to do what we want to do the computer user community grew exponentially and yet we don't call people who don't know what fortran is 'casuals' and I don't think 5 years from now we will call those who game but are not into shooters with online deathmatch casuals either.
The sooner that people accept that gaming is maturing, diversifying and most of all growing the user base by doing all the same things that computing did over the past decade the better off we will all be.