The real problem is that developers keep looking at game design from an unproductive angle. They want to create graphics engines that have the most cutting edge aesthetics. They plow money into online multiplayer servers. Honestly, just because a system can produce better visuals, does not mean that you have to make a game with realistic or highly detailed graphics. Sometimes, gamers just want more enemies on the screen, smarter AI or better draw distances. Honestly, I still think that Dead or Alive 3 and Ninja Gaiden (Xbox) are some of the best looking games I have laid eyes upon. They could have stuck with those visuals and simply improved the draw distance and I would have been fine. That is why Blizzard is so successful with World of Warcraft. That game still looks like it is a game from the late 90s, however, it has a lot going on at any one time.
If developers want to save money, they will quit wasting resources on graphics (which is the real financial drain) and licensing engines (e.g. licensing Id tech, Unreal etc), and spend more time improving existing game design and aesthetics. People don't mind the dated graphics in World of Warcraft. Nobody cares about the dated graphics of the Wii. People just want reasonable visuals and a fun game.
