This is true. Tekken 3 was like the 3rd best selling Ps1 game, second best selling fighting game of all time and best selling fighting game ever if we're talking pure fighting games, and this was 3 gens ago.
It's hard for me to pinpoint why - other than the fact that the average video gaming consumer is more concerned about shooters and what not, the significant drop in fighting game popularity makes me ponder.
Didn't SF4 resurrect the genre? /s
There are many reasons:
- FG are not graphic monsters anymore. The need to keep a steady 60fps and the death of arcades (leading to cheap low end hardware for cabinets) forced fighters to become light on graphics.
- FPS were new for console gamers in the past gen. Halo came first, but it was an Xbox exclusive when everyone had a PS2. FG are "been there, done that".
- FPS multiplayer is (generally) chaotic, so even if you suck you are probably going to get some kills, and the deluge of XP points and bar filling makes you feel like you accomplished something no matter what you do. FG are a 1v1 affair, you either win or lose and online you're going to get destroyed many times before you learn to do something.
- FPS also have meaty single player modes. FG have crappy single player content, except for Mortal Kombat.
However, FG are also getting some more attention thanks to tournament streaming and pro players, and I think they should bank heavily on that. They are great for spectators, have a ton of depth and can last for a long time. Too bad the console environment isn't that great for competitive games.