Yes, graphics matter, but super sophisticated graphics are only important for certain types of games:
Last week I bought FM2 for my 360. The realistic graphics, physics and audio are what make this game so enjoyable and immersive for me. FM2 is a classic example of a game that is striving to be as close to life as possible and, of course, realistic graphics play a major part in that and add a great deal to the experience.
The week prior I bought Mario Strikers for my Wii. Now I reckon that this game has great visuals - nothing as technically impressive or 'photo real' as what is on show in FM2 but this is not what the game is attempting to achieve. Mario Strikers has a superb 'dark' cartoony art style which is realised beautifully on the Wii.
Ignorant people bash the graphics of Wii Sports, but the graphics are more than adequate in conveying the action, have their own unique style and are a visual representation of the simplicity and accessibility of the game. To add superfluous fluff to the graphics in Wii Sports would have been a bad design choice and is the reason that it looks the way it does. Personally, I think it looks great.
So to summarise, graphics are important, but technically cutting-edge graphics are not mandatory and are certainly not required for every game - Pong with HDRI lighting is still Pong.
For the record, I'm 32 and have been playing since the G&W / ZX Spectrum days. My first game experience was Pong down at our local youth centre and I was blown away (not by the graphics but by the concept of controlling what was on the TV screen:) ).







