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@leo-j,

I believe the meaning of that is: Gameplay is above Graphics. You don't need PS3/360 graphics to make a game good. If Lair is any indication, if the gameplay is lacking, the graphics won't help any.

Its not that graphics don't matter; visual art style is what really makes/breaks the game. And, you don't need high-end graphics in order to achieve a pleasing art-style that fits the game.

Okami is a perfect example. The original demo for the game showed realistic graphics. However, due to hardware limitations on the PS2, Capcom decided to go with a cell-shaded art style. Look how that turned out.