Ohno! Don’t mention Mirror’s Edge! 
I was so in love with it’s demo (the music, the gameplay, everything). Than I bought it, played it, and sold it immediately. The demo looked refreshing and original, but in the full game the only refreshing part was the design (which was awesome, actually): the story sucked, the cutscenes sucked, and what looked like an original gameplay was definitely undeveloped, and in the end quite repetitive. Also, it was soooo short.
There are plenty of innovative games still being created, they are just obscured by all the big titles. This is like comparing independent cinema to the Hollywood blockbusters. The industry has grown, it is a natural progression.
The market has matured and there are now big budget games. Much like big budget movies and pop music, they prefer the tried and true formula. These games are making a bucket load of money so they are achieving exactly what they intended to do. I much prefer an innovative movie but I don’t complain that the mainstream movies are changing the industry.
If you like quirky and innovative games there are plenty out there, just don’t expect it to become mainstream. It like expecting the next Britney Spears album to involve strange time signatures and a sitar solo.
Although I agree in parts, I do feel that this whole argument has missed the biggest factors contributing to this issue, the publishers and the economics of making games these days.
Development costs are rising all the time to keep up with hardware advancements and player expectations which has raised to bar significantly when it comes down to how many copies of a game that must be sold simply to break even. These days a game usualy has to exceed the million sold mark or more just to pay-off the developement costs, a target which previously would have been considered a resounding success. This makes it more and more difficult for game studios to take chances.
This is further compounded by the higher price of games and the struggling economy which has led to buyers purchasing less often and being more selective and safe with their purchases. Since gamers cant afford to purchase large quantites of games (first hand) they’d rather spend their money on something which they already know they’ll like (sequals), or something which all their friends are playing. This has led to a polarisation of the market where a small number of popular titles sell exceedingly well and everything else doesn’t sell enough and makes a loss. Given this trend, building and owning a strong franchise is now pretty much the be all and end all rather than simply making good games.
You also have to consider that the industry is now pretty much owned exclusively by a number of mega publishers, there’s very few independant AAA studios left. Its the publishers who really call the shots and they are companies only intrested in selling games for profit, not in making them. These days publishers are only really interested in purchasing and building franchises, and if your studio is one lucky enough to make a games which turns a profit, then the publisher will want to milk that game idea dry until its dead and will only fund you to do so. If however you do take a chance and loose money and end up with a game which the publisher believes cant be turned into a franchise (which is the likely outcome given the market) the publisher is likely to shut you down faster than you can blink.
Of course there are exceptions, but not many.
I do agree about the analogy with Independant movies. This is why I feel that we, indies, are naturally bound to call for (and rant against lack of) originality more than others. So, natural debate all the way I guess 
Do not challenge me!!!
It’s starting to irk me, the publishers enslave all these studios and drive them to the ground (Call of Duty, Guitar Hero, and now Mass Effect 3).
until modern shooters are beaten to death with a stick, these publishers will continue to ship the same game every month (DAMN YOU EA!!).
All the Indies can do is try to make some unique and cool games, and maybe, just maybe, this thing could turn around or at least a few gamers will expand their palette for the variety of games 
I think it’s better to look at it as an opportunity. The lack of innovation in the main stream AAA game development is what gives the indies something unique to offer.
Cloning a game or making a game refining a game is going to be a lot quicker and safer then coming up with a new concept, prototyping and not even sure if the public will respond to it at all.
I loved gears of war3, arkham city and splatterhouse. Dont get me wrong I love games like LA Noire, Heavy Rain but if you do come up with a concept and people like it its only a matter of time until the big boys scoop it up. TD, aeon of strife and Narbacular Drop and crush the castle.
In baseball they have “talent scout” maybe the big developers should have something similar to look for the next big idea at colleges and universities kids with lot of free time.
The only case I saw was Activision latest Indie Contest (where they would give proper funds to a winning indie concept). But it turned out that they never made it something big in the end, and put far more marketing/manpower on their milking franchises habits.
You could say it’s the fault of the winner who didn’t make anything with their money, but what about Activision then ? They could have pushed it far away towards AAA titles.
The best part : with the competition’s agreements, Activision did gain major copyrights on the game. So they secured their right to exploit the best indie idea, but never made anything of it, talk about a waste…
Furthermore about the big studio sponsorship idea, and here as a gamer more than a dev, I would be a bit annoyed if big boys only waited for small ones to have a brilliant idea to buy it and take all the glory. It also tickles me that they wouldn’t want to simply hire good game producers from the start.