That's just sad, and wrong.
My son has a PS3 and the only activity games I can think of are the dancing ones. The rest are sit on the tush and push buttons. I, at 42, actually enjoy the Wii Fit. I tried a Zumba disc this morning and it kicked my backside in a short amount of time (THANK GOODNESS no one else was around to see that! Sheesh!!)
Years ago at the school I worked at there was a very large girl who one of the coaches was trying to work with. Her mother got extremely upset. She said, "I'm fat, she's fat and we're always going to be that way and I don't want you trying to change it!" Unbelievable.
They are putting her in grave danger. Maybe you should turn them in and consequences be darned. Parents should want the best for their kids, not be enablers for the worst.