I've wondered about the little use of background blur, motion blur and soft focus until recent days, because they add a lot realism with little use of CPU.
Great art direction and design mean a lot in realistic games too. Great milestones of combined technical and artistic performance are Gears of War and Resident Evil 4. The freaky enemies, mood-setting lighting, beautiful level design etc. etc. add a lot to the mood. One of the freakiest battles I've had was the one against the steel-clawed blind dude in the dirty torch-lit dungeon in Resident Evil 4.
The experience beats every horror film scene I have ever seen and it has a lot to do with graphics and animation. The Wii is capable of running Res4-like epic and realistic games. I haven't bought Wii yet because there are none at the moment though. It's now more of a matter of quantity than quality, that is, Wii isn't capable of handling huge and detailed surroundings AND realistic looks. Res4 has one of the best balances I have seen. Metroid Prime 3 might look better than Res4.
Because art direction means so much these days, people are not going to buy PS4 or Xbox 720 for more advanced harware. They need to offer something else.
