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the fact is that the quantity and quality of 3D content that is required to produce a modern videogame requires a huge number of man hours


You are correct in every point: I just want to clarify that nobody forces developers to make games that look as good as they do. They could easily provide 30h of gameplay with the same amount of work but the game wouldn't look as good.
It has primarily nothing to do with the power of today's consoles (more power is ALWAYS good). Its all about the competition.

So the sentence: HD games are expensive to make is false.
But: Expensive HD games are more successful. Is correct.

Its comparable to movies. Bug budget movies are more successful. On the other hand some movies that do NOT have a big budget can be highly competitive too.

And Lair is a bad example: Their problems were definitely not in the Graphics sector. They nailed that one. But they sucked at basic things like level design and controls which exist 1:1 on non HD consoles.