The progress of gaming is directly correlated to the advancement of graphical capabilities - as graphics have gotten more realistic, videogames have been able to become more immersive, emotionally-affecting, and gained the ability to tell stunning stories that simply weren't possible in the days of 8-bit. That's why the current generation of consoles is so great - where really the only major innovation is improved graphics. Companies like Microsoft and Sony get why people like videogames - and it's not their gameplay, stories, and design. We love them for the graphics. Graphics are the only thing that matters in gaming, which is why everyone should go buy a $2000 PC and play nothing but Crysis 3 for the rest of the year.
Let's face it: cutting-edge graphics are worthless. They are way more expensive for a company to create (which leads to a distinct lack of risk-taking in terms of gameplay), they often approach the "uncanny valley" (defeating the point of the entire graphical endeavor), and they lead to longer load times and engine slowdown that are wholly unnecessary. I mean - don't we play videogames to ESCAPE reality, not re-create it? What gamers really want are graphically minimalist games: think Limbo or Braid, where gameplay is the key and a more artistic approach to the graphical sensibilities is tantamount. No one wants hyper-realistic particle effects if the core gameplay is boring or bad. If the game you're playing doesn't look like it could've been made on a home computer in 1997, what's the point?