Rubbish. Look at the stuff Sega was producing in the mid to late 80's!
^ I agree with this.
I would argue that the most innovative games back then were the ones that tried to really simulate the environment and make you feel like you were actually IN the game with multi-sensory effects. The late 80s really seemed to tap into that extra dimension of physical involvement. The first games that come to mind when I think about innovation were all made by Sega: (1) the moving After Burner cockpit, (2) the moving/swinging Thunderblade cockpit/chair, (3) the rotating Galaxy Force UFO-style cockpit. These ones all had major wow factor, and they were the ones that I remember talking to my friends about. "Wow, did you hear about Galaxy Force! It rotates all around, and... yada yada." Also, when I was a kid, I had a limited quantity of quarters. For me to dump 4 quarters into a game (very expensive at the time), it had to have been pretty sensational. Yes, they had cockpits before that... but nothing like the ones Sega made. (Hard Drivin' was kind of close though with the steering wheel feedback.) The other game around that time that pops into mind for the multi-sensory effect was Operation Wolf with the realistic, rattling Uzi. It really felt like you were mowing down bad guys in the jungle.
If you think about it, games today are STILL striving for that multi-sensory effect to put you in the game. Wii games with motion controllers, vibrating gaming chairs, rattling steering wheel controllers, etc. I will even admit that those Sega games weren't always the best players, but from an innovation standpoint, they really stood out in the arcade.
All the other innovations mentioned are definitely legit and truly innovative. However, I'd say that from a research paper standpoint, it would probably be easiest to write about this kind of multi-sensory feedback and trying to put players "in" the game.