Every PC and games console (sans handhelds) have been 64-bit since the Gamecube, PS3, and Xbox 360, as these were all PPC systems. The Current Xbox One and PS4 use 64-bit x86 CPU's, and every CPU except for some embedded models have been 64-bit on the PC since 2004.

The only reason Microsoft keeps releasing 32-bit versions of the Windows OS is because enterprise (eg businesses with 500+ employees) have slow hardware turnover, and various things from embedded XP in subway turnstiles to POS kiosks at Target and Bestbuy still use it. These systems may only have had 256MB ram in them.

The point when you need a 64bit OS is when you have more than 2GB of ram. If you have 4GB of ram, XP only uses 3GB, and most 32-bit software when it runs on a 64-bit OS only uses 2GB.

You can blame Firefox and Google Chrome for dragging their feet in building a 64-bit browser, and Adobe for dragging it's feet on a 64-bit Flash implementation for why so many machines still run 32-bit OS's despite there hasn't been a need to run a 32-bit OS since Windows Vista. Most of the non-Windows platforms switched to pure-64bit (eg MacOS, Linux and FreeBSD) and Windows-on-Windows 32-bit layer has worked fine since Vista.

What doesn't work are 16-bit Windows programs on 64-bit OS's, and this is a problem that is extended to API emulation like WINE. You can't make this stuff work because the underlying CPU tricks can't be invoked. Hence you need to actually emulate a 32-bit CPU emulating a 16-bit CPU for 16-bit software to run. Why people are still trying to use 16-bit software (other than the few games that did) is a bit of a conundrum.

I've known people to keep their Windows XP machines around just to run 16-bit software, and people have kept their Win98 machines to run DOS software. We shouldn't need to keep this old hardware around, but we do, and not just for that. WinXP is the last OS that supports legacy hardware (eg ISA expansion cards, serial ports, parallel ports, floppy drives) and only Pentium 3 and earlier hardware still has that.

But these machines mostly just collect dust. People are too lazy to migrate their data, and not competent enough to deal with virtual machines.