"The history of game art is a lot like that of everything else related to videogames: People started making games, decided they needed art to go with games and hired artists to make it. When the art actually started appearing in the games was when things started to get interesting. And now that making art for games has become its own (lucrative) career niche, the potential for chaos and misunderstanding has snowballed into an ongoing debate from which none of us, it seems, will ever be able to extricate ourselves.
Not without help, anyway."
Russ Pitts Speaks with Pandemic's John Enricco, Joseph Hatcher (the developer of Bob Ross's The Joy of Painting) and Penny Arcade's Mike "Gabe" Krahulik about "The Definition of an Art Form."
The Definition of an Art Form
What I think you're missing here is that the games are the art. Not that the art in games is art. A game is artful when it combines a fluid sense of visual and auditory presence with an engaging sequencing of events and control physics that most accurately reflect the style those factos produce. Or, really, any way you want to mix those elements and whatever else you've got at your disposal. "Art direction" isn't the end of a game's cultural merits.