Surely the PC needs to start being the groundbreaking platform for innovation before it can continue being it? I've never heard someone mention that word without games like Ico, SotC, Okami or Katamari Damacy coming into the conversation immediately, maybe with a muffled Portal, I will grant you - but then again, there's the Wii...
And you seem to be implying the consoles only do blockbuster titles? I deleted my several attempts to counter argue that because I was getting irate. They most certainly do, hell they're pushing to get small teams cranking stuff out on their highly convenient digital distribution methods as much as possible - that’s basically what XNA and C# are for, and Sony threw Everyday Shooter up double quick time. Sure, stuff like Halo and God of War get sales and publicity, lots of both, but there's still enough love for the cult titles by Nippion Ichi (purely for example) for them to stay profitable.
I was also half-heartedly arguing here that Final Fantasy XI was a (partially) console-based subscription game that enjoyed large success, but I think I've posted enough indirect venom for a crushing, face-burning riposte when I check this tomorrow anyway.