I don't know much about racing games, but looking back at the past few years, it seems like the genre has declined a lot since gens 5/6.

Back in the mid-to-late 90's, Racing games were some of the biggest critical and commercial hits on consoles. On the PS1 and N64, you had the first two Gran Turismo games, other slightly realistic games like NASCAR and Colin McRae Rally, arcade styled games like Need for Speed, Wave Race, and Ridge Racer, futuristic racers like F-Zero and Wipeout, and many of the best kart racers of all time. And these games sold millions of copies and garnered widespread acclaim. VGChartz estimates over 100 million copies of racing games were sold on the PS1 (at least 10% of all games sold) and 40 million on the N64 (over 17%).

The same thing continued on Gen 6 consoles. Games in series like Gran Turismo, Need for Speed, Project Gotham, Midnight Club, and Burnout got rave reviews and millions of sales. Four of the Top 10 bestsellers on PS2 were racing games, and about 9% of PS2 games sold were racers. The ratio was actually higher on the GameCube (10%) and Xbox (12%).

Since then? Racing games have rarely had outstanding reviews, and the presence of hit racers has diminished. The PlayStation 3 sold at a ratio containing roughly 7% racing games, with Gran Turismo 5 being the only racer in the top 30. The Wii only sold about 6% racing games, even with the titanic Mario Kart Wii, and the 360 sold at the same 7% as the PS3, despite the emergence of Forza.

Although it is a bit soon to tell with the newest consoles, racers don't seem to have experienced a renaissance. Critically, only the Forza series (besides 5) and MK8 have stood out. The ratios of racers sold out of all retail games as of this moment are 6% on the X1, 4% on the PS4, and 9% on the Wii U (MK8 is a miracle worker).

What happened? Did people get tired of racing games? Did the best series decline, with nobody to pick up the slack? Was the popularity of racers an oddity of the mid-90's through mid-00's?

Im hoping the same will happen to FPS-genre soon, all genres needs a reboot once in a while...

Its not the only genre that has seen decline over the years/generations.

The arcade racing genre is barely present these days, outside of mobile gaming.

So nothing to talk about really, people lost interest.

I think VR can help the genre moving forward.

I'd argue the FPS genre has stayed relevant because developers do more to make unique experiences. Lots of room to try new things.

Racing games tend to do a lot of similar things. Sim racers, Mario Kart clones, and 90s arcade racers sum up most of the genre.

I think VR can stimulate some sales for the genre. Its going to make it a more immersive experience.

But after people have seen a dozen VR racers, it can get stale again.

Racing games was often what was used to show off the graphics that was possible on a console. In a racer you can easily make things look better than they really are. If you drive slowly the old games were not all that pretty but in full speed everything looked super flashy. In those days graphics was king, much more than today.

Good question.
This is my point
Sims got too realistic
Arcade racing games got too unrealistic

When they got rid of multi player most of my interest went with it. Least still have Mario Kart.

Maybe most racing games were lower budget games, a class of games that has pretty much disappeared. There is hardly anything in between AAA and indie games anymore.

It takes a lot of work to make good looking interesting tracks. There are still some racers on PC yet they rather push realism over fun, trackmania an exception. Racing games have fallen behind the curve when it comes to graphical prowess. Sure the cars look nice, environments are no longer eye catching. Even Driveclub doesn't look all that special without the rain.

Open world has become a popular way to increase content with the same assets, not having to make all different tracks. Yet that also decreased the fun factor of mastering a track and turns the game more into a todo list. Sure Forza Horizon is great and I even enjoyed The crew, it's not Motorstorm though or the old burnout games.

Perhaps VR can help a bit, unless it becomes the same hurdle as, you need a steering wheel to enjoy this. I'm still buying racing games, yet apart from DriveClub, haven't enjoyed them all that much this gen. (Haven't played FH2 and FH3 yet though)

I would like a new Rallisport Challenge (Dirt got repetitive fast and doesn't control well without a wheel), new Burnout (not openworld) with splitscreen racing and hot seat crash mode, new Motorstorm (not city nonsense), new PGR (yes to city tracks from all over the world), new Driver (I liked Driver SF, Sao Paulo perhaps?), new NFS hot pursuit (not openworld or at least multiple maps), new Wipeout (maybe Redout is good) and GT7.