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I believe we still have quite a distance to go graphically.
Gaming graphics are still relying on skin design so that the object being rendered is simply a frame of what the object is. This means that physics and constraints need to be emulated an object the frame represents.

It also means that any physical effects on an object require texture and polygonal manipulation rather than physical emulation on the object.

What this means is that after these "skin" graphics will look good enough to the eye, the processing and graphical power will need to be pushed up a good percentage of power before more realistic "physical" graphics come through.

And this actually fits very nicely into say the 0.95 to 1 value of the y axis of the above graph.