Graphics matter only to a point. When you first pop-in that game and you are like "wow, this looks nice". However, that can only last so long. It has to be good gameplay and atmosphere that keeps you playing.
I remember an old game for the PS1 called King's Field. It's graphics were subpar compared to many N64 games, but the atmosphere is what kept me and my friend playing.
That being said, a game shouldn't ever have you thinking (that object looks like crap) while in the middle of playing (aka: something looks so bad it breaks immersion). If we do, the developers did not do their job.







