Even something as weird as an MMO sidescroller already exists. How is there supposed to be innovation when everything’s been done already? Most innovation is a particular mechanic, but they always fall into a genre.
Sorry I can’t stop laughing. Of course it depends on how you define “casual”, but there are plenty of examples regardless of your definition, I think.
As for innovation, saying everything’s been done or anything fits in a genre is self-defeating, I think. First person puzzle games had been done before, but that didn’t stop Portal from being incredibly innovative. Having shared mechanics with established games doesn’t make your game not innovative in other ways. There’s always a way to make something new.
Also, I think innovation isn’t limited to completely new ideas. So there’s an MMO sidescroller? Does it work well? Is it fun? Is there something you can do, some new mechanic you can add or old one you can take away that will change the way it plays? Taking established things and changing them or combining them IS innovation, in my opinion. And there’s always more ways to change and combine things.
I think that, most importantly, we still got the uncharted territory of games with different gameplay experiences for different players (read as in “each player plays what is a wholly different game from the other”), which, I guess, can mostly be seen in RTS+FPS mashups and, my favorite, Breaktris. There’s actually so much room for innovating that we fail a lot to see it, and end up going with what is already established.
Also, originality and innovation is overrated. Doing something completely original has much less value (“money and anything else”-wise), in my opinion, than something not so original, but well done. Take the Minecraft vs Infiniminer case as an example (yes, I’ll keep using that one forever, thanks a lot for the influence, ghRibacki). Did Notch come up with the concept with building a world with blocks, and make everything blocky and all that? No. Maybe not even Zach did (Lego, anyone? Although Zach did come up with a pretty nice way of presenting that world). What Notch did was to build on top of a potentially successful idea, and then proceed to make it more fun. And boy, he did manage to do that. But, did he have the right to do that? Absolutely. There is no such thing as a completely original idea. Everything is a remix, kids.
Maybe, just maybe, instead of asking ourselves “What hasn’t been done before?”, we could be asking “How do I make people have fun like they never did before?”.
P.S.: Go check the games made by all these people I mentioned, hours of fun guaranteed for everyone!