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It's not about the graphics themselves. With tools like photogtammetry any indie can look amazing these days. Ray tracing will also eliminate the need to handcraft lighting and LLMs will provide a tremendous speed-up to scripting.

Thing is, that as games look better, you need to include a lot of things that consume a lot of time and money like better animations, facial expressions, voices, etc. else they just look flat and it negatively impacts the suspension of disbelief.