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Both, there is a shift in genres. RPG's in particular are getting worse, while shooters and action adventure games are getting better.

When I look at old RPG's like Final Fantasy IV-IX and compare then to stuff like Final Fantasy XIII, the retro games were just better. Sure XenoBlade was great, but PS1 had XenoGears and Chrono Cross. Sure have have gems like Fallout 3 and Mass Effect 3 now, which are great, but there were just more quality RPG's in the past then there are now, Remember Chrono Trigger?

Now for action/adventure, I don't think we're getting better, but we're getting more high end games. Ocarina of Time will always be for most the best Action Adventure game, but this gen we saw Uncharted 2 & 3, We saw 2 Mario Galaxy games (opposed to 1 Mario 64 game), two more Zelda's which were nearly as good, we have like 5 Assassin's Creed games, and Portal 2 is also great.

Shooters are getting better, Doom on SNES/PC was pretty horrible compared to any Halo/Call of Duty game, but to be fair Halo 1 and Call of Duty 4 will always be the best of the series IMO. Also while GTA IV and V are sandbox games and not shooters, they have improved gradually since the PS1 and even PS2 days.

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So a bit of both, RPG's are dying, shooters are getting better.

Also handheld games are getting more plentiful, I remember Final Fantasy Adventure on GB was pretty lame, especially compared to something like Bravery Default. While Pokemon Red/Blue, Link's Awakening, Metroid II, and Super Mario Land were good, new iterations are just as good if not better, but now we have more stuff to pick from like Fire Emblem, Animal Crossing, and even Uncharted.



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