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If by diminishing returns you mean the progress is not as fast as it used to be then I agree. The Graphics dont get better that fast anymore. Partially also because the progress in Computer Technology slowed down a bit. In the late 90s early 2000s everything went super fast and graphics made huge jumps. 1998 Half Life just 8 years later. Progress slowed but its still there and I think if CPUs and GPUs would have improved at the same rate we would have 4k 120 FPS by now. And overall better graphics.