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The bottom line is all hardware platforms are basically getting to the level now where you can spend to your hearts content and bankrupt your studio even on the lower spec platforms, lol.
PS4 level games can cost more than $200 million if you want to pump out Horizon: Forbidden West of GOW 2018 tier visuals, Switch 2 will be able to likely do that and then some, same with tablets, smartphones are getting there.
So really a "retreat" to like PS3 tier visuals isn't going to happen, you're just going to have PS4 tier as your floor for everything and then many studios struggling with really pushing past that floor because the budget quickly balloons out of control if you want to make an epic game.
Even with Square-Enix we're seeing this ... FF7 Rebirth looks fine, but it's not like a monstrous upgrade over FF7 Remake or something that looks any better than Horizon: Forbidden West.
For the "we love graphics!" studios, fine, great, you can jerk off on graphics even on lower tier platforms now and make games that will rake up a massive bill if that's what you're looking to do, you don't even need the highest end hardware to do that any longer.
