I was considering this question after playing persona 4. I loved the game, but I also wondered if a game with HD graphics would even be created? It seems like a lot of niche games will have trouble in the future because of a catch-22. They'll be expected to make some use of the hardware and in so doing probably drive up their costs, reducing the viability of producing a niche title. It's seems similar to what Hollywood has done with movies...made mostly generic stuff that will sell, nothing too risky.

I know that we are seeing a lack of innovation on one what front (by the number of sequels -same as hollywood) because of this problem. There is some innovation out there, I'm not claiming there isn't. I'm just wondering if the variety of genre's and 'artsy' games will decrease.

Question: Do you think that rising production costs will limit niche titles and prolong dev times? AND would you rather have more good  fun games (Nothing that is a technical powerhouse but maybe a decent story, experimenting with the medium) at the expense of graphics, CGI etc.?

Personally, I rather have a good dev team make a game every year, rather than once every 2-3 years, but that's just me.

WE could probably have both, but it's something we can discuss.

It's like film. There are the big, soulless, summer blockbusters, and then there are creative indie films.  

If you're on a team with a $300,000 budget, you better have a fresh idea or you'll get lost in the crowd.  If you've got a 7 or even 8 figure buget, you have a lot of nervous investors that are going to want a sure hit, which these days means guns, alien nazi zombies, and multiplayer.

To answer your question, no.  What we've learned this gen is that people aren't interested in new graphics technology as much as they're interested in trying something new.  And on each platform there are options for indie developers that had never existed.  Castle Crashers, Fat Princess, World of Goo - low tech, low budget, huge fun.

In answer to OP question: Nope for the first question and for me yes, but some peoples enjoyment of a game might come out of awesome graphics (I'm pointing to the butload of PS3 fanboys that have to label every new PS3 exclusive the best graphics of this gen).

With Question 1, I think the age of downloading games online really saved alot of potentially niche/quirky games and we'll see even more "niche" titles then we have last generation because small developers can now produce a 4-5 hour game and distribute it with having to produce discs (I recently played castle crashers and that game only lasts 4-5 hours, but it only costed $15). Also, games sold at retail in discs don't always need to push boundaries graphics wise to look good, look at Prince of Persia, it is hardly a super high res textures zomg marvel but it's artistic style sure as hell looked better than nearly all that came out last year.

Of course the most well known games will be the super heavy weight graphics games, but that's pretty much the same as last gen (Halo, God of War, Gran Turismo, MGS3 etc).