Yes, computer graphics have continued to get "spiffier," and technology continues to march forward. Unfortunately, the quality of games has continued to slide downhill. No, that's not quite right. There are still good games released, but for every excellent game on the market, there are a slew of others that are boring, bug-ridden, painful-to-play wannabe's. Why? Because the factors which determine high-quality games are being stamped out by "Big Money."
The same disease which has permeated the movie and TV industry has now infected the computer gaming industry. As soon as there's one big hit, everyone wants to make a clone and ride that same wave of success. From a business standpoint, the desire to invest money in a successful "formula," and create a spin-off or copy-cat of what worked in the past seems like a solid idea. The problem is that we are dealing with an ART FORM. It is not the technology or materials used which determine success, it is how the audience embraces the attempt and takes ownership of the experience. The reason I conitnue to play Diablo 2, Neverwinter Nights, and Warcraft III is because fun gameplay trumps shiny graphics, new technology, gameplay options, and pretty much everything else.
The failure of businessmen to understand what makes good art is why the movies, TV, and computer gaming industries are throwing more and more money away to turn out weaker and weaker products. Now that I think about it, this has happened in every industry which has become a big money-maker. As potential returns have climbed higher and higher, businessmen have bought their way to the head of the creative process in an attempt to turn a profit. Their focus on making money while being blind and deaf to what makes good art has caused them to throw increasingly large piles of cash into production while stifling the artistic talent which makes the product worth buying.
This is why you see production values plummet as soon as things turn lucrative. Whether it is in literature, graphic novels, movies, TV, or computer games, as soon as investors take over the production of an art-form, art itself is handed a pink-slip. The result of that is more money spent to generate an inferior product.