I think it's more that the intent of games has been diverging for a long time, to the point where they are really several different art forms all getting lumped together under the category "games." The most obvious that come to mind:
- interactive fiction, both movies (Heavy Rain, Beyond: Two Souls) and novels (To The Moon, MUDs)
- simulators of various kinds (most FPSes are basically war simulators, or at least laser tag simulators, but also stuff like racing and flight sims)
- pure gameplay (platformers, 4X games)
- puzzles (Tetris, Bejeweled, The Witness)
- others...
Then those get combined in every imaginable way by the developers, yielding a huge spectrum of games so that it's very difficult to put most of them into a single category. At the edges they're still fundamentally different things. They're never going to evolve into a single Platonic ideal that can be called "games" (that was closest to being true back in the Atari days, where everything was fairly similar to Pitfall or Donkey Kong) - just keep diverging into different experiences (especially with VR coming around now), while still maintaining a continuous spectrum of different types that borrow from the best (and worst) parts of the purest genre forms.
The extreme focus on high-end graphics and realism is mostly due to the influence of a few of those genres - simulators and interactive fiction. That's a huge portion of the market, so it seems like all games are just about graphics now, when that really isn't true.