I’ve got pretty similar thoughts. I wasn’t into gaming all that much up until relatively recently when I built my first gaming PC at the beginning of pandemic. Thanks to that, I’m not only on market for bleeding edge AAA titles, but also discovering 3 dacades worth of PC games. My observation is that games got worse over time. They’re also a lot more expensive to make because it all must be visually impressive, which usually ends up with poor performance and bugs, requiring high-end hardware for the game to run somehow. Quite often games are broken and unoptimized on launch, they have that generic formula, watch cinematic, hold a button, watch some more, here’s your little tutorial fight, now more cutscene and a crappy puzzle. It really makes me feel, if game developers were more limited by hardware constraint and unable to feed legions of normie players to flashy graphics, they wouldn’t have other way to makes games attractive other than with better mechanics and level design.
Meanwhile Nintendo continues to release bangers for their ancient potato console.
Game development got more expensive because people want more complex games. No one wants to play a shooter with loading screens, everyone wants to play an open world game. Even if you tone down the graphics, such development will still be a lot more expensive.