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Shiken said:

You literally just described the PS2/launch PS3...new games exclusive to the platform but will natively play previous gen titles.

Nothing will change. We are reaching the point where visual leaps will look smaller no matter how great they are due to the quality we have been able to achieve already. However I have said it before and I will say it again, there is more to these leaps than raw graphical power. There is also processing speed, AI, visual effects outside of resolution, physics, draw distance, and how much info in these virtual worlds can be processed at once. People need to lose this idea that resolution and framerate is what decides the leap, it isn't and it never will be.

Actually I think with VR being a focus in the coming generation hitting a 2k/120fps target will be compulsory, at the expense of better visual effects/complexity. But as you said we're kind of at a point of diminishing returns when it comes to graphics, and over the next 15 years or so we'll just be inching our way towards photo-realism and shouldnt expect any dramatic leaps until then.

Also I'm pretty sure the hardware we have currently is capable of much smarter AI, it's just that it's not progressed much in the last decade for various reasons (like cost to implement, "smart" ai not scoring well with game testers bc it may seem frustrating and innaccessible, multiplayer focus etc.). Not sure about this tho I don't really know much about it just remember reading about it awhile ago.