The decline is real but the rate of incline back in the day was a serious thing too. I don't see people talk about that much. The 1980s started with games like this:
And by 1989 we had an open world, first person shooter-RPG hybrid, adventure game, with vehicles. And instead of the crappy walking simulation of modern RPGs, this one let you skii everywhere because it was set on a glacier, and there were handgliders. In 1989!!
1989!!!
A year later I also got the best fighting game I've ever played. Not like all the dumb beat em ups, this was realistic fighting. And you build a character and assigned all the moves from a big list of moves, so the character would fight exactly how you wanted.
Same year, one of the best platform games, and it used motion capture. 1989!!
Civilization series began, 1991. The birth of RTS with Dune and amazing C&C. And Heroes of Might & Magic. Tie Fighter! Fallout! SimCity 2k! Syndicate! Elite! A universe on a 720k disk. Games like Lemmings, original creative beautifully made.
A full blown squad based simulation, in 1993!
By the end of the 90s there were shooters so slick I couldn't believe my luck, like Unreal Tournament. All before 2000: Age of Empires 2 was a masterpiece. Some RPGs so deep I still play them today. Lemmings had competition from stuff like Worms. A bunch of really good Tycoon games. Tony Hawks skating, Gran Turismo, Wipeout, Driver, Need for Speed, GTA, Homeworld, Jagged Alliance 1 and 2, etc..etc.. All this existed before 1990's ended.
Flight Sims had competition amongst multiple companies:
Every few years brought a new game that really pushed everything forward. The incline was steep. I felt like it was only logical that 10 years from then, we would have games even more mind blowing than all of these. But instead around 2000 that incline hit a brick wall.