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Sal.Paradise said:

This is exactly what I would have said 10 years ago though. People forget about the march of progress so easily. I remember seeing old usenet posts about diminishing returns in the early Dreamcast era - how much further could we possibly improve graphics from upcoming 128 bit beasts! How can we expect developers to create games on PS2/GC/Xbox hardware, it's too powerful and complex!

It's the same spiel every generation, difference is now Nintendo have a weaker machine to sell, so they'll be saying it too, not just forum posters. 

But look at the graphics we have now, Sal. There seriously isn't a lot more we can do to them. 

You can get down to the nitty-gritty but in the eyes of the consumer there won't be much difference between this:

and what can already be seen in FFXIII/2.