The thing is, there's a difference between a bad game and an uninnovative game. Many would say cod4 is uninnovative and generic but I think most would agree that it's a great game nonetheless. The problem with those midway games you mentioned except UT3 (was this by midway?) is that they're generally seen as bad games. Area 51 was a glitchfest. They sold poorly because they were bad not because they were uninnovative.

UT3 is published by midway.  CoD4 does innovate on the console FPS adding a lot of gameplay elements as well as changing wartime shooters as they're not all set in World War II.  As for Nintendo games they innovate their own formulas quite often as SMG had platforms you could walk on all sides, play with the gravity, puzzles that were based around the elements of the game. 

The real risk with Hd titles is spending a lot of money to make a bad game. Granted there are a few good games that don't perform very well but most of these titles sales can be predicted in advance based on the popularity of the genre like Valkyria Chronicles. if sega lost money on that game, then their planning was very poor because SRPGs never pushed huge numbers.

SRPGs can sell well enough to make a profit, just VC was a new IP and had few ads and no one outside of the internet users talking about it.

How have nintendo innovated with  the super smash bros and mario kart series aside form graphics? Why are they still selling so many copies? The sales have even increased due to wthe wii's higher userbase. On the other hand, most agree that Ubisoft innovated with the new Prince of Persia and what happened to the sales?

Bikes are new for the Kart series, as well as the 12 player multiplayer, and what made me mad is the increase of cheap items appearing but it's a big change as well.  Smash brothers also had huge changes from melee with a lot of the techs people used in melee being taken out and more balancing of the characters with more techs being put in as well as online being added (despite people talking about it being bad it's pretty seemless for me heh...)

If you ask me, with some series, it's when they tried to change the working formula that sales started to dwindle. Case in point: Need for Speed. The Hot pursuit series were loved by many but they retooled the whole thing and tried to copy Gran Turismo instead. I'm pretty sure if they just polished the graphics and added more options, cars and tracks, the series won't be where it is now. Just look at COD and gears: the same thing retooled over for even less money and the sequels are thus looking to be even more profitable.

Gears is a new IP for this gen that did a lot of things differently so your point there is fairly moot.

I even forgot Dragon quest which is the most obvious case of the same exact thing over and over yet people can wait to pay their money. Many nintendo fans are excited for DQIX and X

Most people buy RPGs for story not gameplay and pretty graphics though lots of RPG makers have forgotten but series like Dragon Quest and Disgaea keep to that very well and are popular because you get a new creative story in each game.

 Well, Mario Kart had the Wii wheel and motorcycles (and online, though not all together innoative (although it is for the series).  Brawl, while it had a much improved single player (and online (which doesn't work too well, albeit)), probably was less innovative, but the series is much loved, has only had two titles of it before in the past 9 years, and has had a much hjigher install base to work with, so the sales are expected (although, I imagine another SSB game released, at least, soon, probably would not see such great sales unless it change something big).   Comparing these games to the Wii-whatever series, however, shows how far innovation can go.  Also, yes, perhaps an innovative game flopped, but that's just one case you provide.

 Well, Mario Kart had the Wii wheel and motorcycles (and online, though not all together innoative (although it is for the series).  Brawl, while it had a much improved single player (and online (which doesn't work too well, albeit)), probably was less innovative, but the series is much loved, has only had two titles of it before in the past 9 years, and has had a much hjigher install base to work with, so the sales are expected (although, I imagine another SSB game released, at least, soon, probably would not see such great sales unless it change something big).   Comparing these games to the Wii-whatever series, however, shows how far innovation can go.  Also, yes, perhaps an innovative game flopped, but that's just one case you provide.

HappySqurriel was trying to make the point that a lot of developers are trying the old strategy from last gen which was copy everything everyone else does and make profit cause they look like a popular title but it's no longer working as a whole and putting some companies out of business, when it costs an exceptional amount to make a game no matter if it's good or bad you have to sell at lot more then you did last gen which is hard to do, plus the higher costs also make developers push games out faster because they need the revenue to continue work, and glitchy games usually get updated to actually work ala Lair.

Judging by the games Happysquirrel mentioned, I don't think minor tweaks were his idea of innovation. Online is pretty much expected with games of those genres. Street fighter Iv added online, a revenge bar and a focus attack to the same old formula...is it innovative too?

Being that I'm pretty sure you still don't understand what I was initially saying, I'm not too sure you should be making assumptions about my opinions ...

You seem to be under the assumption that I am being critical of the small number of very high quality sequels that repeat a very successful formula for great results. I am (and have been) talking about the much (much) higher number of amazingly mediocre games that offer absolutely nothing new to the genre or series except for better graphics and higher production values. Seriously, if id focused on producing the same kinds of games they have produced in the past several years (Doom 3 and beyond) without the advanced graphics would anyone have cared about these games?