I'm not really a gamer, due to lack of time as much of anything else. I certainly don't have as much insight into the industry as Mr. ruggels, and if he agrees with the analysis, I'm willing to take his word for it. And then add a few of my own:
<snark>Gods forbid anybody should have to use their imaginations when playing a game. Of course, you can't use what you don't have, and I can't blame the game developers for catering to the larger market. It also puts them in a good position for when imaginations are banned in the name of homeland security.</snark> And now that I've got that out of my system, on to some serious commentary...
While everybody seems to talk about games and the gaming industry 'going Hollywood', I hope they can do better than that! Hollywood is currently sinking into a pit by releasing movie after movie that needs a large audience in order to make a profit, so it can't offend anybody too much and has to try to appeal to as many as possible, and the result is flavorless to the point that nobody really likes it. Audiences decline, theaters start showing ads in order to prop up profits, and more people stay away from the theaters, in a vicious cycle. As game budgets go up and developers and publisher need to start worrying about truly mass audiences, hopefully they can take a lesson from Hollywood and at least find different mistakes to make.
My real point: as the high end goes up, the low end trickles down. We may not see any more commercial 2D games, and wackiness and toony-ness may be going away as well, but the technology has put all of that within reach of small teams and even individual hobbyists. Wacky, toony games and animations are alive and well in the world of Flash and Shockwave. There's a lot of crap, but there is also some superb work being done, and as people gain experience, and more people come into the field, and the tools get more sophisticated, the absolute quantity of good stuff will only increase. And with the Internet as a distribution medium, creators who want to do wacky and toony can connect with the audience that is looking for wacky and toony. I'm no believer in Internet-spawned utopian visions, at least not anymore, and anybody who wants to make a living off these things is going to have a tough row to hoe. At the same time, people are making this stuff and putting it out there, I've seen it with my own eyes.