“Design me a graphics!”

Just taking a broad view of the industry and videogames technology in general, it is now fairly safe to say that graphical fidelity can't increase any further. There are some incremental gains to be made through procedural animation of human characters, facial animation, environmental interaction and use of lighting but these are technical considerations.
The increased expense of creating high-quality art assets for games has seen two trends emerge: the increased use of art outsourcing and the increasing prevalence of stylised graphics.
But if games are now reaching the era where they can all potentially attain photorealism thanks to skilled outsource companies, they can't all employ a unique graphical style to make gamers buy them instead of their life-like competitors. So what's left? Two things: great game design and compelling narrative.
Great game design will shine through the worst graphics, but doesn't need million-polygon characters to make it work. As for narrative (note I didn't specifically state story, although that is obviously your main narrative for RPG and adventure games) it provides meaning for the player's actions, encourages them, enlightens them and ultimately entertains them. However, we have a problem here, namely the games industry isn't structured for creating these sort of games.
Most game development is geared solely towards tech. Developers and even some publishers have their own 'Central Technology' group to keep pushing that photorealism “target”. Alternatively, Dev teams buy in expensive off-the-shelf game engines that turn out to have narrow applications and surprisingly large costs for trying to bend them to anything unique, so end up creating games that are only slightly different to all the others using the same engine.
In terms of design, it is based around 12-24 month iterations of simliar products and staffed by non-creative Designers whose role is reduced to copy+pasting last year's documentation and adding some extra features, because “hey, it doesn't really matter – the new photorealistic graphics and animations will sell it for us”. Yeah, except that's not going to happen any more as all games can now afford to look photorealistic, remember?
There is a dearth of innovation in this industry with only a handful of companies willing and able to take the next step. Bioware and Bethesda are two companies that are continuing to push design and narrative. EA are to be applauded for taking the financial risks to release Dead Space and Mirror's Edge. However we need more. We need to bring design and narrative to the forefront of game development now that we have reached a level playing field in graphical terms.