Much depends on what type of game is .. when it comes to a shooter, it is mainly about the quality of textures and everything works properly. Once this is a simulator, it certainly has a great role in graphics quality as well as physics.
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Absolutely, games like Battlefield really ramp up the quality of realistic simulation, not just with graphics but destructible environment and use of appropriate lighting which makes it not just a brilliant shooter but also an amazing military simulator as well (although not as good as ARMA 3). And then you have games like Minecraft which are more sandboxy, Physics and Graphics take a backseat to creativity and adventure (which make up the elements of gameplay).