Creative has it's own share of problems but main problem is microsoft for current pc audio market .They removed hardware audio support starting with vista ,now everything is done with software ; while everything done with software no reason to build x-fi like hardware audio chips. Creative tried support hardware with openAL but no fruit i guess .
Both Creative and Microsoft are responsible, but I think the root cause stems from Creative. Creative could've worked to keep PC gaming audio relevant to the general PC populace (or even just the gamer submarket), but they didn't. Maybe Creative never really knew how to market their stuff; their products practically sold themselves in the Sound Blaster 16 days. Creative later killed Aureal, their only real competitor, and didn't have much of a strategy when on-board audio started closing the performance gap. Sure, there was the EAX lockout at the time (most Realtek audio now come with EAX2), but I don't think enough games used it. CMSS-3D is pure awesome sauce, but how many people were aware of it? Consumer PC sound cards were slowly but surely going the way of the NIC. During the Audigy and X-Fi days, their poor reputation stemming from iffy software (needlessly 10 or so different programs lumped together when RAM was not yet abundant) and drivers (the creeping popping and crackling on 32-bit OSes with real PAE: namely, 32-bit 2K3 and pre-SP2 XP32) didn't help either. And then there was that whole Daniel K. thing. By the time Vista rolled about, dedicated PC audio was no longer on the mind of most consumers. Microsoft had simply mercy-killed it. Sure, it was unnecessary since there's always the hope that Creative or someone else could one day revive consumer PC audio in the future, but it was an understandable move even if I didn't agree with it.
This is coming from someone still rocking an X-Fi card. I wanted Creative to succeed. But they didn't do anything towards that end in the face of progress. The last true X-Fi card, the Titanium HD, was too little too late. Looking at all that they had and then lost because of dumb decisions makes me sad.