I could be wrong, but my personal impression is that much like on HN, it's the enthusiasts who are quite into niche stuff like indie games and bemoan the graphics race, where as the silent mass of "average" gamers are more like "oh man, the new Call of Duty has even better graphics! I can't imagine playing the old one anymore."

The average gamer is buying Fifa and Cod every year, but that doesn't mean it's because of the graphics. I'm not convinced that a change in graphic fidelity had any meaningful impact in their sales for the last few years.

The big problem with AAA studios is that they are basically just investment vehicles, and they are big investment vehicles. So, only big successes matter, and they can only get big successes by trying to go all out and pray to become the next big thing. Moderate success is not enough. Huge returns on investment on small investment is not enough. They have to spend tens/hundreds of millions and return billions. Once they get a success, they have to milk it.

They are getting eaten by Roblox and dozens of indie developers eating up customer time and accepting more moderate success (Huge success for a small studio, negligible for a large one).

And more accurately, the average gamer (by market spend) is only playing mobile games.