There seems to be this collective disbelief among gamers suddenly that graphics "couldn't possibly get much better," which I think  is silly, bordering on ignorant (and I mean no offense as I know people often loathe the word "ignorant").  But we have no idea how much better things can get, and we won't until--really--someone does it.  The new Unreal Engine shows graphics that, as it sounds, might not exactly be possible on the Xbox360 or PS3--at least without some kind of compromise.

I find it hard to imagine graphical and engine effects improving much over what we have now, but I've felt this way in the past, and I know that it's just silly to think that things couldn't improve much.  Keeping in mind the old rule that computing power doubles every 18 months, and this generation is lasting longer than any other, there are some massively powerful machines on the horizon.  Engines are pushing this generation to it's max now--Frost 2 and Unreal and the CryEngine 3.

It's not just general graphics either, it's graphical effects, physics, lighting, reflections, refractions, number of things animating at once, level of animation detail, level of AI detail, number of players playing at once, framerates, size and scope and more.  I see all the time where games are limited by modern technology.  Blurry, surprisingly low-res textures are in pretty much every game.  Gears of War hides it's limitations in fairly linear stages with scripted events.  L.A. Noire has some often terrible framerate issues.  I see visible seams in polygons.  I see textures being drawn in.  I see pop-up moving through game worlds.  I see clipping all the time.  

Essentially, I see the limitations of this generation all over the place now.  And I'm sure you and pretty much everyone else sees it, too.  This generation has never looked better--but it's also very easy for us to now see it's age.  We're used to the current consoles and what they can do, and we're used to their limitations.  

I don't know exactly how much better things can get or look, but I know enough to know I shouldn't dismiss how much further things can go.  Personally, I don't think a new console generation should ever come about unless true advancement can be shown--a major, obvious leap forward.  And it could be that Microsoft and Sony want to make sure they actually can show a big enough leap forward.  For Nintendo, it's easy.  Pretty much anything they did was going to look better than the Wii.  

A new rumor cropped up from GameInformer that Avalanche Studios, the developers of Just Cause, are currently "expecting" a new generation, and new consoles in 2014.  It sounds like they don't have Xbox 720 or PS4 dev kits, and are speculating based on their experience in the industry.  2014 is just fine by me, and by that time (if it does turn out this way), we should see some incredible, currently unfathomable improvement in gaming.  

After all, in two generations, what was once a "really amazing, detailed and incredible FMV sequence" now pales in comparison to the average gameplay footage of any major disk-based release on Xbox360 or PS3.  The leap from PS2 to PS3, or Xbox to Xbox360 was arguably the biggest this industry has ever seen.  Why would we dare assume that the leap to the next generation would pale to this?  Because graphics seem to have reached an apex?  It can always get better!  The next generation may feature Bulletstorm-like over-the-top antics without being scripted events.  That much insanity, detail and chaos--all in real-time, and dynamic.  A game like Prototype with Gears of War-level detail in every corner.  No more compromises:

No more "small scripted area in order to have the most intensive graphics."  (Gears of War)
No more "stuttering framerates to allow for a detail-rich area."  (L.A. Noire)
No more "compromising graphics to fit as much action on-screen at once." (Prototype)
No more low res textures.
No more polygonal seams.
No more draw-in or pop-up.
And if not totally "no more," then certainly, "a helluva lot less."

All I'm sayin' is, we shouldn't dismiss how much further developers can push things just because this generation seems to have reached the top where graphics are concerned.  It about a lot more than just graphics, and even those can still be improved.

Nintendo hasn't been interested in pushing the tech of their machines into the stratosphere for two generations now.  The GameCube was a powerhouse in it's time, easily more powerful than the PS2 and Dreamcast, but since then, it's been all about conservative power output in their machines.  There is no indication that Wii U is pushing any boundaries that haven't already been met (technically) by the PS3 or Xbox360, and that keeps with Nintendo's current style anyway.  Microsoft and Sony, on the other hand, I expect them to pull out all stops where hardware is concerned--and I think they'll blow our minds.

I consider myself quit well versed in hardware technology and build computers as a side project for fun.  If you like, I can build a PC for under $400 that will most certainly take down the PS3/X360 in game performance.   As for competing against current top end PC hardware, not a chance.

The PS3/X360 may render a game at sub-HD levels or even 720p if you're lucky but rarely with much AA applied and then you'll get 30fps...60 if, again, you're lucky.   A top end PC will take the same game with better textures, more polygons, better shaders and give you 1920 x 1080 or higher, with lots of AA, lots of AF and more than 60 fps quite easily.

I don't think you grasp just how much more powerful PC's are than the HD consoles.  Irstupid is actually correct.  The PS4/Next X will not exceed the gaming capabilities of top end hardware right now.

I consider myself quit well versed in hardware technology and build computers as a side project for fun.  If you like, I can build a PC for under $400 that will most certainly take down the PS3/X360 in game performance.   As for competing against current top end PC hardware, not a chance.

The PS3/X360 may render a game at sub-HD levels or even 720p if you're lucky but rarely with much AA applied and then you'll get 30fps...60 if, again, you're lucky.   A top end PC will take the same game with better textures, more polygons, better shaders and give you 1920 x 1080 or higher, with lots of AA, lots of AF and more than 60 fps quite easily.

I don't think you grasp just how much more powerful PC's are than the HD consoles.  Irstupid is actually correct.  The PS4/Next X will not exceed the gaming capabilities of top end hardware right now.

Maybe this is just me, but I fail to see how a modern "high end" PC is more powerful than hardware that doesn't even exist yet.  The only way to know this would be to have the hardware specs of non-existant future machines.

Not that this really matters since PC gaming has long since fallen behind console gaming where sales are concerned.  For one thing, just because a tweaked high-end PC could handily show-up a modern console, most consumers have a vastly easier time playing those complex games on a console, and most don't bother with what is otherwise an expensive endeavor for the regular consumer.  Just because you can maybe build a super powerful PC for relatively cheap doesn't mean that's even remotely the norm for consumers.  Consumers pay three or four times what you quoted for Macs that handle a great deal less than playing Crysis 2 at it's maximum settings.  

I guess what I'm saying is that, while you--a tech-ish guy--can cleverly build a powerful PC for the cost of a PS3, the average consumer is unable to do so, and is content buying an inferior machine already built by, say, Apple or HP or Dell or Compaq, etc.  Especially if said consumer is using a laptop, which are typically no where near as easy to tweak as a PC tower that can just have more crap crammed into it.  I'm a huge gamer, but I really don't care about constantly upgrading my computer so that I can play the latest games at their maximum settings.  I just buy those games on the Xbox360.  

Of course, if they aren't on the Xbox360, I just don't bother.  I have enough to play anyway.

Edit:  Then again, it might not matter how the exact specs of the next Xbox and Playstation stack up against PC's of the same era anyway, since the only people that typically care about such differences are the extreme-minority tech-focused PC gamers looking to make those comparisons.  Okay, and the occasional developer that has the time and money to want to make the most technically powerful game imaginable.