The gaming industry spent billions pursuing the idea that customers wanted realistic graphics. Did executives misread the market?
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A lot of comments in this thread are really talking about visual design rather than graphics, strictly speaking, although the two are related.

Visual design is what gives a game a visual identity. The level of graphical fidelity and realism that’s achievable plays into what the design may be, although it’s not a direct correlation.

I do think there is a trend for higher and high visual fidelity to result in games with more bland visual design. That’s probably because realism comes with artistic restrictions, and development time is going to be sucked away from doing creative art to supporting realism.

My subjective opinion is that for first person games, we long ago hit the point of diminishing returns with something like the Source engine. Sure there was plenty to improve on from there (even games on Source like HL2 have gotten updates so they don’t look like they did back in the day), but the engine was realistic enough. Faces moved like faces and communicated emotion. Objects looked like objects.

Things should have and have improved since then, but really graphical improvements should have been the sideshow to gameplay and good visual design.

I don’t need a game where I can see the individual follicles on a character’s face. I don’t need subsurface light diffusion on skin. I won’t notice any of that in the heat of gameplay, but only in cutscenes. With such high fidelity game developers are more and more forcing me to watch cutscenes or “play” sections that may as well be cutscenes.

I don’t want all that. I want good visual design. I want creatively made worlds in games. I want interesting looking characters. I want gameplay where I can read at a glance what is happening. None of that requires high fidelity.

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