How much does more advanced technology really add to a game? I know minecraft and other innovative game designs could never run on older gaming consoles, but do better graphics and faster computing really make recent games more fun to play than old style NES-SNES games? To me, it just makes games harder to make and play because of the higher production cost and tougher system requirements. Maybe it's just nostalgia, but older games feel, both atmospherically and fun-wise, very similar to newer ones, and since its harder to make this current style of games, game designers take less risks and have to use a more systematic gameplay(quest systems, campaigns) to make them easier to manage.

What are your thoughts on this?

Maybe it's just because I'm colorblind, but I can't see a damn thing in all these games with so-called HD graphics. I've caught myself running straight at an enemy, unable to differentiate them from the wall and wondering where all the hostiles are, only to get knifed in the face. Similarly, super-advanced physics engines only really add something to games based on using physics, like Portal or Half-life 2. In your average shooter, I hardly notice that exploded barrels are rolling more realistically than they used to. They occasionally provide some fun moments, like shooting an airborne petrol tank in Crackdown, watching it fly off, then getting put on a police hitlist five minutes later...because it rained back down and clocked a civilian upside the head. But all in all, rising tech levels just add some sandbox to an otherwise normal game, and there's such a thing as too much of a good thing.

I've always preferred the graphical level of the PS2 and Gamecube, and games with rigid rules and mechanics that you have to learn to abuse xD Custom Robo comes to mind. The levels are tiny and there's hardly any physics beyond the laughable drop straight down when you get blasted out of the air, but the sheer amount of customization and strategy makes it so much fun. Similar can be said of The World Ends With You or Kingdom Hearts: Birth by Sleep. But I wouldn't say gaming is going downhill; those games delivered, and I loved every second of them.

Yeah, I guess it's more about the developers adding useless additions, where the technology could be used in really cool ways

Hahah, maybe. That's a scary thought though; I'd really rather not think camouflage is super effective against me IRL xD But that's the thing. I think graphics have gotten more definition than real life. I can spot people as distinct shapes out to a much better distance out here than I can in Modern Warfare. It feels like they've overanimated every blade of grass, every grain of sand, and managed to make everything look 'extreme closeup with perfect sunset lighting' good from 50 meters, at which point it just becomes a Picasso painting.

I dont think the problem is the technology, more like cultural.
On the might unbeatable incredible osome SNES (* 3 reverences*) era, we played the same game for 3 years+ , and yet today we still play them in the emulators.

Today games are discardable, you play just once and even if it takes too long, you find it an issue on the gamedesign.

Id guess the problem is the absurd amount of accessibility due internet, theres just too many games, so they arent very unique (a game will always have at least 3 or more games with the same purpose). So, while on old games youd find "new stuff*" on a game by progressing on levels, today you find "new stuff" by playing another game.

*by "new stuff" I mean the reward game design mechanism to keep the player entertained by presenting him new elements.

Well, obviously you cant expect that technology evolving will make games more fun. Games are fun because of game design, mechanics and story, those are helped by technology, not dependent on it.

In short; no.

Lets not get sucked into 'all old games were masterpieces' becaue they weren't... even something like Super Mario which sucked hours of game play for some people didn't really DO that much. Even when it came to 'new stuff' you got a different tileset, maybe a mild variation on enemies and that was it... the rest was 'run right, jump on things, avoid other things'.

A couple of months ago I played, and finished, Max Payne 3.
It was, without doubt, the best gaming experiance I've had. The game was polished, slick, had a great atmosphere (both audio and visual) and was above all fun. It had a story to tell, it told it and didn't drag it out.

In fact I've probably finished more games in the last couple of years than I ever did during 'the old days' of gaming which, to me, speaks volumes.

I think the question you're asking is missing the point.
The availability of technology in and of itself is a good thing. Aside from a few historical problems (I'm looking at you A-Bomb) the AVAILABILITY of that tech is good.
Now, systematically using this, and setting production goals as being higher tech may be more of an issue.

If you look at older games which you (and I) seem to have a very fond memory of, you'll see that the team size and structure were so limited that the focus was on what game they could do, and let's be honest, it was the far-west of distribution, so aside from a few bigger titles (hey Doom) you could always hope to get some regional success. I may be disfiguring this a bit as I wasn't around (any veteran developed during, say, the Atari era?)

The advanced graphics tech also came with the internet, and worldwide distribution that is unparalleled (digital downloads). This created what some believed impossible: an even more competitive environment.

Whether they have ideals or not, most players respond positively to a good marketing campaign and companies can sell their product much more efficiently than the competition, regardless of the gameplay. The reason for this is that it's hard, through marketing alone, to show how your gameplay is really fun. What you can easily do, however, is show how immersive your universe is by showcasing kickass visuals.
It's a lot like what you see other companies advertise. They want to give you a feeling of what your brain should think of when shown a brand, not what the brand actually does. Car companies sell you safety, sense of risk, strength, etc. They don't give you the slighest clue about how it actually feels when you drive your car.
It would be easy to point the finger at marketing, and since this is beyond the scope of this thread, let's just say: everyone does it, so why would wouldn't you? Why would you willingly cut your own sales because you're a 'rebel'? That'd be a tough sale to get across to your boss

Lately, indies have been in a rise, because, much like earlier day developers, they come to the table with an idea, not powerful tech, and they build on a budget. They have a niche, specifically simple gameplay mechanics with good production values. If they can kick it off (Minecraft, Grimrock) no one will care that their visual or animation (respectively) are not up to par with industry standards because they've had a blast.

With that said however, I strongly believe that the best and most immersive games still come from the industry, but they're extremely rare. I often cite Skyrim as an example of the best game I've played in a long time. True, its more visually stunning than Oblivion and Morrowind, but that's not why it convinced me more than these two previous titles. The developers at Bethesda have iterated in creative ways to get to this point and I respect the choices they've made to make a TES that's even more fun to play.

So to answer your question simply: I think the main problem is that most companies look up at successful titles, and rather than see it as a product of iterating on gameplay (which is fairly complex, especially if you don't take the time to play these games as a competitor) they see its stunning visual. Because it is extremely hard to determine whether a gameplay is going to work or not with the audience, but easier to know whether something is visually stunning, there's been a loop where companies trying to lessen their financial risks systematically opt for the better visuals. The problem is that this generally leaves very small polish budgets, an aggressive timeline to release or the inability to redesign aspects of the game later in production.
Particularly successful (Blizzard) or dissident (Bethesda) companies have managed to secure sufficient funding to do more polish (and somewhat less visual). You rarely get to see a shooter where the recoil feedback is more important that the lush environment lighting, but it happens.

Gaming isn't going downhill, its just taking shortcuts, but even big companies are noticing how indies are doing it, and if they don't, then, google: game industry 2012 layoffs.
Indies that do it right will grow bigger, just like currently large companies have once been startups. It's just a phase.