The need for game manuals as tutorials for how to play a game have indeed become rather redundant, simply because it's much more effective and enjoyable for the tutorial to be implemented as a part of the game.
As repositories for a game's background, story, and lore? Still valid in my opinion, some of the best game manuals (not that many bother to read them at all) are richly detailed and provide some interesting context and/or information about the game's setting. For an easy comparison, compare the game manuals from ME1 & ME2; the former is significantly larger and in colour, the latter is much smaller and in black & white.
All those advertisements? Always been there, always been an annoyance. They do seem to stand out more with the smaller game manuals in general these days.
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Anyways, the main reason for game manuals being so much less substantial these days?
Cutting costs
When you really get down to it, this is real reason; the rest is just fluff. Saving the trees? A beneficial byproduct by doubling as a good excuse. The give-away for this is the fact the majority game manuals, even on big-name titles, are in black & white rather than in colour; the correlation between shother manuals being in grayscale and the longer ones in colour is actually quite significant. At the moment, it's mostly first-party developpers who still use longer and a full colour pallette for their game manuals; a few notable third-party developpers may be exceptions, but they are not indicative of the whole. The main aim is clearly to optimize profits, and on a large scale a few cents off the unit cost can have a significant impact; it's also not uncommon for PC games to have their instruction manual either included on the game disc as a file or for it to be downloadable, making that a more effective cost-cutting measure (though these can be more substantial than the minimalist game manuals, potentially on par or even better than the good ones while still being cheaper to produce).
By extension, one could also argue this is the real primary motive behind the move towards digital distribution; quite a few of the other benefits and other arguments are just being used as justifications for said move. Even if making the game discs is relatively cheap, the scale at which they are produced can add up; throw in the costs of packaging, game manuals, and shipping, it really adds up. Profits is revenue less costs; and reducing costs by removing all the hassle involved in releasing a physical product can have a surprisingly dramatic effect.
Everyone gets the benefits, but it's probably not good for the PR to say how much the publisher is benefitting from these decisions. It's not hard to figure out, but they've wisely not drawn attention to it.