There is still a lot of wizardry going on in modern AAA video games. In fact, the video game industry is one of the few that actually care about performance, often more than safety and correctness.
It is just that it is much more complex and much less obvious. Before, an advance could going from flat triangles to textures, using a clever maths trick. Now an advance is better shading in the corners of a room, using a clever maths trick. The difference is that people will be able to tell immediately how an improvement the textures are, but unless they are in the field, they won't be able to point out the shadows in the corner of the room. These shadows are not useless though, it adds up to better graphics overall, but it is not as impressive.
About the AAA gaming industry, the thing is that this is big business, these games are awfully expensive, financed by investors who want to see a return on their investment. Usually, it means that they study the market, see what sell, and do something along these lines. Not very original, but less risky.
The indie game industry is the opposite. There are thousands of studios, they can't beat AAA on content and polish, and they need to come out of the pack, so they need something else, like original ideas. But overcoming technical limitations is usually not the driving force anymore, as there are not that many limitations anymore. In fact, they usually underperform compared to AAA productions because it would be unaffordable otherwise.
I don't know much about the PICO-8 scene, how much of it is about overcoming the (artificial) technical limitations and how much is about using the platform "as intended" and focus on gameplay.
It is just that it is much more complex and much less obvious. Before, an advance could going from flat triangles to textures, using a clever maths trick. Now an advance is better shading in the corners of a room, using a clever maths trick. The difference is that people will be able to tell immediately how an improvement the textures are, but unless they are in the field, they won't be able to point out the shadows in the corner of the room. These shadows are not useless though, it adds up to better graphics overall, but it is not as impressive.
About the AAA gaming industry, the thing is that this is big business, these games are awfully expensive, financed by investors who want to see a return on their investment. Usually, it means that they study the market, see what sell, and do something along these lines. Not very original, but less risky.
The indie game industry is the opposite. There are thousands of studios, they can't beat AAA on content and polish, and they need to come out of the pack, so they need something else, like original ideas. But overcoming technical limitations is usually not the driving force anymore, as there are not that many limitations anymore. In fact, they usually underperform compared to AAA productions because it would be unaffordable otherwise.
I don't know much about the PICO-8 scene, how much of it is about overcoming the (artificial) technical limitations and how much is about using the platform "as intended" and focus on gameplay.