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Now that I'm home and on a PC and not my cell phone, I can elaborate.  Look at what was cutting edge back in 1985:  Pixels that could resemble a person.  A few more frames of animation.  We couldn't imagine how "Mode 7" would possibly work.  When something like the SNES or Genesis hit the market, we were blown away by the detail.  There was "scaling and rotation".  Gaming couldn't get much better than this.....until systems started using FMV and polygons....then gaming was totally maxed out....until PS2 era graphics hit (even Nintendo reportedly said we had reached a point of diminishing returns and that graphics were good enough--I remember this quote clearly!!)....and then online gaming (which existed for several years but was finally done right--and improved upon this gen).....and HD graphics......and motion controls.  Every time we figured that gaming could not get any better, it did.  I remember people thinking that the Snes was no better than the Nes.  I remember people thinking (for example, ME--) that the Xbox 360 didn't look much better than the original Xbox.

The gaming industry always finds a way to take our expectations and blow them away.  I felt the same way about this generation back in 2005 as you felt about next geeration, right now.  I even went as far as to say I would quit gaming after the end of the Gamecube and PS2.  Fast forward a few years and I wound up buying every system on the market and buying more games this gen than any gen before it.  There were these AT&T commercials over a decade ago that talked about technology coming in the future that seemed to border on science fiction.  Things like instantly watching a movie or paying for bills online or video conferencing.  It all happened.  Look at something like Kinect--or the Virtual Boy--or the Wii Remote.  There's something out there that guys like you and I couldn't even imagine--or something that was released too early but is being perfected.  There's something that's going to make the industry thrive and survive like it always has since the NES hit the market.  After doubting in 2004-2005 (I figured no game would EVER look better than Resident Evil 4), I quit doubting. 

I'm a believer.  Let's just sit back and see what the industry has in store for us.  It'll be fun.  I promise.