Graphically FM 7 has cutbacks as well as improvements. In actual gameplay, spray looks more realistic, lighting is way more dynamic and improved overall and lots of other stuff. Rain isn't always the same either, other than in FM6.
At the same time we've had a ton of racing games on Xbox. Three Motorsports, two Project Cars, two Dirt, Assetto Corsa, multiple WRC and Formula 1, not to mention the more arcadelike yet more fun Horizon.
Releasing Forza 5 immediately before 7 might not have been the smartest move either.
And yes, real simulation crowd might not be that big. If i where to make a guess, the real simulation crowd is probably not that big on any platform. Now Forza Horizon might have taken away all those gamers that aren't interested in all to realistic racing games.
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