The inflection point for diminishing returns appears to be the PS3/360 generation

[ICStats]

JazzB1987 said:

People comparing PS4 with 360 launch titles WASTE everyones time because you cannot compare those 2 gens. Why?

2005 was BEFORE we were able to simulate 90% of real world effects in gaming. Just look at games like SaintsRow 3 Battlefield 3 etc and how their e.g "wet streets" look great compared to shit like SaintsRow 2 (that also was on 360) etc. Somewhere around 2010/2011 everything suddenly looked way better than before.

For me the 2005 to 2011 change is more obvious than the last gen to current gen difference.

The 2005 launch games mostly looked better because of the huge power gap (better textures more polygons etc) not thanks to better effects (people didnt came up with most of them yet).
The PS4 and Xone launch titles on the other hand mostly look better than 360 launchtitles because of the effects that showed up around 2011 not so much because of better polycount or textures. Sure PS360 gen has some ugly textures tho but every dev that knows what he is doing will not use PS2 textues!

I agree with you, launch Gen 7 in 2005 didn't look as good as Gen 7 games in 2010/2011.

That's precisely WHY we're comparing launch-to-launch.  Your analysis tells that launch games are not as good as it will get.