Europe is definitely starting to catch up with the US and they're making better stuff on lower budgets. Especially Eastern Europe is doing very well. Witcher was my fav RPG of the last few years and STALKER my favorite FPS.
The problem is the plastic as you call it. The stuff coming out of the US is incredibly cheesy, looks and feels fake and lacks character. But if you take a look at the darker games or those with character, they're nearly always European or from another non-US country. Mass Effect, for example, is a typical US product. It's shiny, flashy, yet the atmosphere never really pulled me in. It's all too shiny, too slick.
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