i don't like when people talk about game design as if it's a science that we make incremental progress towards understanding.
most people understand on some level that games are a creative medium and that an industry sprang up around that medium to fund projects, and that those two things aren't the same. but it's always surprising how completely people can lose sight of this when they talk about art and craft.
game designers in the 80s "didn't really know what they were doing" in the sense that they didn't have nearly as much prior work to learn from, and didn't have as clear an idea of what would sell. genre boundaries were fluid and vaguely-drawn. so they tried everything they could think of (and could get away with on the brutally limited hardware), resulting in an inspiringly eclectic range of stuff, much of which had the unsurprisingly shonky feeling of a first draft. and we love a lot of that stuff, partly because it showed us what was possible within the medium. those early designers felt like explorers.
whereas today it feels like almost every discussion is about the market - what will and won't sell, what ideas get the most attention, what mechanics will wring the most money out of players. and with the enormous money pie has come a vast body of conventional wisdom dictating things about art and craft. many designers have "become smart" only in the sense that they've fully internalized that market thinking; compared to their predecessors there are so many more things they deliberately do or don't do because they know it would help or hinder, respectively, their game's salability.
and anyone who loves the medium feels the ill effects of this on some level - we know that the total range of what is possible in the medium is being sieved through the market, that there are games we don't see, ideas left unattempted, because of this. so we might vent that frustration as "games are worse".
but we need to state plainly that this is an indictment of the market, not of the medium, and a clear sign that we need to look beyond markets and their dogmas to explore the furthest most exciting reaches of the infinite space of human creativity.
I broadly agree with this, although I would emphasize a few points differently. First, there's my usual contention that games can only ever mean commercial games, and more specifically blockbuster games. There are still developers today making the kind of dialogic games we want out of games. The problem is they're producing this work either outside or at the margins of commercial games, and games writing in general is heavily incentivized to cover only those products at the core of commercial games. It's a cultural problem as much as an institutional one.
But to return to the historical side of things, I'd point out that developers weren't flying as blindly as we might think genre-wise (they had a lot of feedback, and they responded to it), and they weren't making games purely for art's sake. Video games were marketized as early as the early 1970s. Yet I don't know how to hone in on this, but even from the larger studios and even when games were conceived as something for players to consume (granted, under very different conditions), those games generally were more dialogic than what we see today. Can you imagine Sega today responding so directly to contemporary political culture as to release a game openly lampooning a former prime minister? Or a studio at Jaleco's level flagrantly violating copyright every six seconds?
Was this a product of the backdrop into which games were released: the arcade, niche magazines and the fandom that read them? Tight technological constraints forcing developers to hone in on a set of very well defined ideas, thus creating the terms by which a dialogue between player and game can take place? The casual nature of development, even at large studios (not to mention media production in general in Japan)? Again, I'm not completely sure. All I can do is point to examples of this phenomenon.
All I can say is that as far as this kind of design going away is concerned, the call was definitely coming from inside the house. World 1-1 discourse is the easiest example for me to point to - we've reduced dialogue to a scientific problem of maximizing player engagement - but it also comes fairly late in video games' history; too late to really explain anything (the mid 2000s, if anyone's curious). To understand what's actually going on, you need to look at industry trends that were starting to become apparent only toward the end of the 1980s. Unfortunately, because this is just a Cohost post and I'm writing everything off the top of my head, I can only offer the lightest of sketches of those trends and where they went:
Whether we're looking at market performance forcing upon studios the need to distinguish their products through calls for more of something we already understand (more processing power, more edgy attitude to our character, more shit to discover (too much for a single rental from Blockbuster to cover)), or the cultural need to legitimize the medium artistically by tailing film through the pursuit of photorealism, the end result is the same: the culture elevates one specific mode of expression as the only legitimate mode of expression.

