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Bitmap Frogs said:

But customer demographics change, old customers eventually get burnt out and new generations don't necessarily have the same taste in games.

Just like film franchises, reboots and changes of style are inevitable - else franchises just die. By the way, when you say "Super Paper Mario was a disappointment" you are talking about forum reactions or the consumer at large?

Very on topic, Final Fantasy mainlines have been dwindling - and besides XII, they've all been evolving vertically. 

I'm not sure what you are trying to say.  If consumers are no longer interested in the gameplay of a franchise then do you create new franchises or do you milk the franchise name for all its worth?  You seem to be for the latter.  I would rather a franchise fall into disuse (like Punch Out did prior to the Wii iteration) than compromise itself.

As for Super Paper Mario, I am talking about the people I know and the people on various forums I visit who were saddened by the fact that Super Paper Mario threw away the gameplay of past iterations.  I wouldn't begin to speculate too far as to exactly what percentage of the total sales of Super Paper Mario they make up however with over 2m copies of TTYD and SPM each, I'm sure there is some overlap.   Also, I'm hoping you're not about to try a "sales equals satisfaction" argument which is only slightly more silly than a "sales equals quality" argument. 

As for Final Fantasy titles, I would argue that they have been changing (not necessarily innovating) with every iteration rather than improving.  Ask someone what their favorite Final Fantasy story was and you will likely not get the latest one (12) as an answer for example.  They change some of the gameplay with each iteration but their storytelling ability and character design really have not improved at all in my opinion.  If you listen to some people who praise the old Super Nintendo Final Fantasy titles, you might think that they've suffered in those areas.  That's not the sign of a franchise improving vertically.