gameplay and the story is what matters, at least to me.

Well, everyone is biased at a certain point at least. My conclusion was simply reading the thread, the division in the opinions is clear like water. And Nintendo having worse graphics is a new trend starting with Wii, normally they had the most powerful consoles and that is the cause of the bias I'm talking about. Besides that, even when Ninty had the most powerful device, it wasn't a difference even close to Wii vs. HD twins and Wii U vs PS720.

And no, 2D games can't all be pulled from a PS1. Rayman Origins and Kof XIII are two good examples of beautiful 2D games that were possible with this gen. 3D games are far from their objective, that is simulate the reality. Graphics can always improve until they reach the level of complete photorealism, that still is far from now. 

And we can't put the blame for the demise of every studio in development costs. Some studios close simply because they made the wrong decision. What THQ had to stand on this own in the market? Saints Row suffered comparisons with GTA, WWE was buggy, Metro was a poorly optimized game... They made a lot of bad decisions and that led them to close.

Development costs can't be solved simply by deciding to make crappy looking games. We need better engines and better development tools. And that is what we are having now. X360 is way simpler to develop for than 6th gen consoles. Even talking about PS3, its hardware isn't as strange as people say. It uses a normal GPU and Cell is the only challenge here. It isn't a big problem to port games from X360 to PS3 and then to PC because of all similarities between them. If we analyse a  PS2 game, the port was a nightmare because of the extremely different tech on it, it was radically different at architeture-level than the other consoles and PCs. If the rumours are correct, PS4/720 will be even easier to develop for and porting will be simple between platforms.

Indeed they do. Between Graphics and Steam sales I usually buy games on PC whenever possible.

that makes a great point, its really hard to know too, i mean it isnt something visible like graphics or animaiton. but looking at the last of us i never seen AI that good, i cant judge until the game is out though lol. but i agree AI depends more on the dev then hardware

In CoD's case, probably is the focus on multiplayer. If we take Battlefield 3, that is a technologicaly advanced game, the focus on multiplayer does the same thing. BF3 campaign AI is attrocious, horrible. You allies always try to get to theirs scripted locations, even if that means that they will have to push you out of cover and straight on the fire. 

the art direction does

This is the only part where I disagree with you . I don't think N64 is good enough at rendering round objects. GameCube, however, is an easy fit.

both game and graphics matter, why can't we have both, even gameplay matter more, graphics is very important, now take a look at the zelda demo for wiiu, what if it looked zelda skysword, there would be hardly any hype for the game.

Yes, but mainly because of the lack of 1080p @ 60 frames per second.

Once that benchmark is passed on consoles, I don't know. That's all I really want out of the next gen, graphics-wise.

I really don't think I ever cared for graphics much, except I never liked Pre-NES games, but those were so bad you couldn't decipher what was what.

In fact, I have been buying PS1 and Genesis games, playing, and enjoying them more than a most my PC and PS3 games this year.

I hope more developers get back to making great games, even if it means going cheap on the graphics and focus a ton more on gameplay, art style, etc.