Sogi-Ya: 2004 was when people started using the 3D tech as a tool to create real three dimensional game environments because that was the point when quality of 3D tech caught up to 2D and people recognized it's potential to create actual three dimensional environments, prior to that it was just playing with polygons to make the same old 2D designs.
F4LL0UT: I think you're kinda confusing the dates here. I mean, in 1996 we already had Quake and Tomb Raider, in 1997 we got Quake 2 and Jedi Knight, in 1998 we got Half-Life and Unreal, 1999 was the year of Unreal Tournament Quake 3 and lots of other notable 3D games. The truth is that by 1998 those "fake 3D" engines such as the Build Engine were already considered dated and "real 3D" engines were the standard. And I don't see how the games and technologies of the Quake/Half-Life/Unreal generation were less 3D than the ones we got in 2004.
I was talking application, not technology.
the tech was there long before people started using it (Ultima Underworld had a fully three dimensional environment long before ID popped out Quake) but virtually no one was designing on a three dimensional level until Doom 3 showed people how much lighting effected the game world and Half-Life 2 showed people how much vertical (as in multilayered) environments expanded gameplay.
prior to that most everything released was still being designed with everything existing on a single surface; the surface may have been a bit wavy and some of them managed to get a bit wide in addition to being long, but few actually managed to go for long, wide, and deep.
the games you mentioned were notable exceptions to the norm (I argue about tomb raider's inclusion though, most of it's environments were built on a single surface instead of having one environment stacked on top of another environment, Homeworld would be a better inclusion IMO for it's application of space battles not happening on a flat surface) while most everything else was just two dimensional designs built with polygons.