Key Points:

The shadow of Andrew Carnegie hangs over James Packer, inheritor of the Australian media dynasty's fortune and captain of its halving in the turmoil of the global financial crisis.

Carnegie, the self-made 19th century Scottish industrialist and philanthropist who is regarded as one of the wealthiest men in history, was famously reported to have warned of families running "from shirtsleeves to shirtsleeves in three generations" as fortunes were made, peaked, and lost.

Packer, 41, is fourth-generation money. He turned his back on the media empire that made his family's billions, and is now grimly betting on the new gambling focus that is being hammered in all its main markets.

In the past two years he has slipped from 114th in the Forbes ranking of world billionaires to number 173. And that was before the financial crisis sliced his worth from about A$6 billion ($7.65 billion), to somewhere near A$3 billion.

Late last year Australian newspapers estimated he was losing A$6000 a minute, or more than A$8 million a day.

They have also published pictures of a porcine Packer putting on weight, smoking and emerging from a reclusive retreat into northern New South Wales only for the Australian tennis open and brief business meetings.

He is selling off the most ostentatious of his toys, and deferring the purchase of others. This is, the gossip columns allege, the retreat of a declining billionaire into isolation and depression.

Less than two years ago, the media reports were of Packer's lavish wedding to model and singer Erica Baxter in a private ceremony in France, which was attended by Tom Cruise and Katie Holmes and reportedly cost A$6 million.

Some unsourced rebuttals claim that Packer is not concerned either by the rumours of his decline or the contraction of his estimated value - after all, A$3 billion is hardly penury and recessions do not last forever - and that his plump life on his polo estate near Scone is merely peace and family bliss with his wife and new child.

Life could also be worse. If Packer had not turned his back on the family's media business when he did, many millions more would be vanishing out the door. This week the Seven Network confirmed it had cut the value of its 47 per cent holding in the Seven Media Group from A$793.9 million to zero, following Packer's similar valuation of PBL Media when he dumped his residual holding of his family's former Nine Network flagship.

The Ten network is also struggling, and on Thursday Fairfax halted trading in its shares as it considered raising funds following the announcement of an A$365.2 million net loss for the final six months of 2008.

Nor is Packer alone.

Andrew "Twiggy" Forrest, formerly Australia's richest man, has also crashed with the crisis that hammered Australia's mining sector in general and his Fortescue Metals Group in particular.

Forrest's estimated worth fell from A$12.8 billion last June to A$1.8 billion by year's end.

Property magnate Frank Lowy, who displaced Forrest from the top of the nation's rich list, has reportedly seen the value of his Westfield Group contract by about 20 per cent. Many others have felt similar pain.

But there is no doubt Packer is hurting, and not only because of the money. He broke spectacularly from the family tradition that had built enormous wealth over the three preceding generations, and which had produced his larger-than-life late father, Kerry.

The elder Packer dominated Australia's rich list for years, created a vast and powerful empire, exerted huge influence and lived an infamously hard life of polo, booze and gambling.

When he died on Boxing Day 2005, he was mourned almost as royalty. Political and business leaders from around the world, celebrities and sporting stars packed the Sydney Opera House for a state memorial service.

James Packer stepped into enormous shoes, with possibly even larger expectations.

For his part, he has avoided comparisons.

In a rare interview given to the family's Channel Nine shortly after his father's death, Packer said any such attempt would be "inappropriate".

"I mean, he's achieved so much and I'm at the beginning of a new phase of my life, and people can make those assessments in the future," he said.

"I think that if I try to be, you know, a mini version of Kerry, that I'm going to fail because he was such a larger-than-life character, so I'm going to do my best being myself."

The elder Packer did imprint his heavy stamp on his son. In the same interview James admitted feeling Kerry's polo whip "a couple of times" and that his father could be very scary: "I mean, he could be seriously, physically intimidating."

The young James' education finished at Sydney's exclusive Anglican Cranbrook School. Unlike fellow media heir and good friend Lachlan Murdoch, a graduate of America's ivy league Princeton University, college was not for Packer.

His father, in a much-repeated quote, is reported to have said: "Why would he want to go [to university]? To learn to smoke marijuana?"

Instead, it was life as a jackaroo on one of Packer's outback stations, and an apprenticeship in various jobs within the empire under the mentorship of Albert "Chainsaw" Dunlap, the notoriously ruthless American corporate downsizer.

When he became executive chairman of the family's PBL group in 1998, Packer began to forge his own direction, especially into new media and casinos, neither of which greatly pleased his father.

Especially not One.Tel, the ill-fated mobile phone and internet group that flared and crashed in one of Australia's more spectacular failures. James and Lachlan Murdoch backed the group, sat on its board - and between them lost about A$1 billion.

Nor was Packer snr happy at his son's decision to buy Perth's Burswood casino complex, a major shift in direction and emphasis.

"I think in terms of Kerry's business, Channel Nine was the part of it that was the most important to him," Packer told Channel Nine. "It was the part that meant the most to him, right until the very end."

Packer had already made significant new investments, including stakes in pay TV provider Foxtel, internet portal ninemsn.com.au in partnership with Microsoft, the online employment company Seek Ltd, other online car and ticket sales businesses, and the Hoyts cinema chain.

But the big change came after his farther's death, and Packer's sale of 75 per cent of PBL Media, with its Nine Network and ACP Publishing business, to CVC Asia Pacific in two lots of A$4.1 billion and A$524.9 million.

Last year Packer quit the board of PBL, wrote down the value of his remaining stake to zero, and walked away from a group now burdened by enormous debt and flagging revenues, in favour of vast gambling interest in Macau, the US, Britain and Canada. But the cards have fallen against him.

In Macau, gambling revenue has plummeted with the financial crisis and a dearth of high rollers, especially from China. Beijing has tightened restrictions on travel to the former Portuguese colony, and is pursuing senior officials who lost millions at its casinos - Packer's Crown Macau among them. A huge new complex, City of Dreams, will open mid-year to dismal prospects.

In the US, Packer's Crown gambling empire has lost more than A$700 million in the past six months, adding to a halving in the book value of the group.

Packer's investment in the Stations group of 18 Las Vegas casinos has announced its intention to file for bankruptcy, and his purchase of Cannery Casino resorts has run into serious difficulties.

Although approved in Nevada, Packer has yet to gain a licence in Pennsylvania. The sale has also been threatened by a lawsuit by his sister Gretel, on behalf of trusts which do not want their details revealed in the licensing process, and by a potential counter-suit by the sellers.

In Britain, planned expansion was blocked by the Government's decision to award a new "supercasino" to a rival group.

At home, where A$860 billion was last year slashed from the value of Australian shares in a 43 per cent market contraction - the biggest annual fall since 1900 - Packer has also lost A$48 million through Queensland property developer Sunland, and his 20 per cent stake in Challenger financial services group has been hit by an A$107 million half-year loss.

Packer is trying to sell another of his father's beloved assets, Consolidated Pastoral Company, whose cattle stations sprawl across 2 million ha of northern Australia.

He has also reportedly stopped looking for a new clifftop home in Bondi, deferred new work at his estate at Ellerston in northern NSW, sold 40 polo ponies in Britain, and placed his A$38 million Mayfair apartment in London on the market.

At home he has reportedly put his private Boeing BBJ jet - a version of the 737-700 airliner - up for sale and deferred an intended replacement, and is selling his A$50 million Mangusta yacht.

Life can be tough when you are down to your last few billion.