Sales charts agree: Pokemon isn't unpopular. It was a fad in the late 90's yes, but it still makes a hefty ammount of money every year.
If anything hurts the video game industry. it's Hollywood making a mockery of every video game license they get their hands on. Super Mario Bros sucked, Mortal Kombat (minus the first one) sucked, Resident Evil sucked, House of the Dead sucked, Final Fantasy sucked, Dead or Alive will suck, and Tomb Raider sucked.