Not so much.
IMO, you don't need to have astounding graphics to make the game fun.
However, graphics do matter when they affect the gameplay. For instance, in this arkanoid game, the Ascii version makes it more difficult to see the blocks well and the "ball" (or whatever that is) position, so you may have difficulty to play it. Also, in the sprited version, the "ball" probably moves smoothlier (ex.: in a 2pixels/step speed in stead of a 1character/second speed), which can be better to see, but can result in some bugs like getting stuck at the block - a bug that won't happen in the Ascii version as frequently.
Also, graphics, as well as the sounds and music, often manipulate the players, specially on RPGs. It can seduce the player in such a way that could make a rather simple game with cliché story be called "epic".