1998 was a huge year. We had StarCraft, Baldur's Gate, and Unreal, among many other excellent games. StarCraft raised the bar so high for RTS games that even now, almost ten years later, it's still the preferred RTS for pro competitions. However, I think each of those three were most notable for their high polish and excellent balance, rather than their design innovations....
The most important thing that happened in 1998 was the inauguration of the Independent Games Festival...The IGF took indie game development out of the bedroom, made it respectable, and gave it media coverage. Indie games are now our most important source of innovation (Narbacular Drop, Darwinia, etc.) and my primary reason for optimism about the future of video games....
...1999 also saw the arrival of EverQuest. EQ was in its day what World of Warcraft is today: the dominant MMORPG bar none. It beat the well-established Ultima Online and saw off Asheron's Call as a competitor...
Like Grim Fandango, Planescape: Torment was a commercial disappointment, and for many of the same reasons: its world was unfamiliar to most players and demanded attention and commitment. The game's art, story, characters, challenges, and even language (based on 19th-century British working-class slang) are all unlike anything seen before in the role-playing genre, or any other genre, for that matter. Planescape now has a cult following, and I consider it one of the greatest games of all time. Among other innovations it managed to create a reasonable in-game explanation for why your avatar is resurrected every time he dies.
Ion Storm published two legendary games in 2000, one legendary for the amount of hype that preceded it and disappointment that followed it (John Romero's Daikatana), and the other for the richness of its story and characterization and its imaginative gameplay, Deus Ex. I'll pass over Daikatana without further comment, but Deus Ex combined shooter, sneaker, RPG, and even a bit of puzzle-solving adventure game into a single unique title. Deus Ex gets my nod for important innovations...
...We got some significant games in 2003, perhaps most notably Star Wars: Knights of the Old Republic, Call of Duty, and WarioWare. KOTOR put all of Bioware's famed skill at RPGs at the service of the Star Wars universe, with highly-lauded results. Since it was based on the d20 system and an existing franchise, I don't feel it broke ground creatively, but was an excellent title all the same...
2004 gave us World of Warcraft, City of Heroes, Katamari Damacy, The Chronicles of Riddick as well as numerous successful sequels... The Chronicles of Riddick broke ground by actually being better than the movie that it's based on. Games based on movies are not reliably good and many are distinctly poor, so this was an improvement of sorts.
...Dungeons & Dragons finally got its own online game in 2006, which really should have happened ten years earlier. It was highly anticipated and of course the brand recognition is excellent, but WoW remains unconquerable. Elder Scrolls IV: Oblivion came out and corrected many of the errors of its predecessor Morrowind; it was a massive success for a single-player RPG and advanced the open world concept so ably pioneered by the Grand Theft Auto series...
That brings us up to 2007, and of course it's not over yet. One key event this year was the non-existence of the Electronic Entertainment Expo. E3 had been a glorious extravaganza of self-congratulation, but by 2006 it was collapsing under its own weight. The noise, flashing lights, smoke machines, and booth babes turned it into a seizure-inducing monument to tastelessness.... The most important game of 2007thus far, and I predict overall as well, is BioShock. The game possesses that rare quality of being multilayered, and rewards replay and close attention...
