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I don't think the focus on making games cinematic nowadays is necessarily a devolution of games, but just another option as to where developers want to take their games.

Two of my favorite games of the current generation are Super Mario Galaxy and Heavy Rain. One is not very cinematic at all, and one is basically one long cinematic. I love both.

What remains important in all games is that the gaming mechanics have to remain fun. If they aren't, then that's what makes a game bad.