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JGarret said:
Final Fantasy 7 - 1997
Saga Frontier - 1998
Xenogears - 1998
Brave Fencer Musashi - 1998
Parasite Eve - 1998
Final Fantasy 8 - 1999
Final Fantasy 9 - 2000
Vagrant Story - 2000

Look at that output!

Konami and Capcom were much better too...now, I can understand fewer games as budgets increased, but why is it that the QUALITY also went down in a big way?

They were actually willing to take chances with their game library, too. Parasite Eve was literally a fanfic sequel to a novel, and Xenogears was out there for fantasy RPGs, despite Gundam's popularity. 

This is how much production values have risen over the generations, though. There were literally sprites with jagged pixels up through the PS2 era, but these days a PS4 game which isn't wowingly beautiful won't sell AT ALL. S-E has actually done a very good job of keeping their production values consistent, even if their rate has plummeted--every installment in XIII was a full 40 hour game, which is really impressive these days. Slow development is one of the costs of high production values.

I do wish more developers would drop their production values, though, and toy with some low-budget, low-overhead projects with PS2-era like graphics intended to cost $20-40 (think Journey or even Ghost Trick) and if something takes off, THEN you put the effort into a full gen 8 experience.