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They definitely add atmosphere. That definitely enhances the experience. I enjoyed Final Fantasy VII, but I think I would've enjoyed it a lot less if I wasn't constantly saying "Holy shit, that was awesome!" during the cinemas and such. I find it impossible to play now.

Question: Do you consider things like multiple enemies onscreen (ie: Dead Rising) or destructable environments (ie: Red Faction or Mercenaries) graphical enhancements? If so, graphics do add gameplay.