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My prediction is that by the time graphics reach meaningful photorealism, the terms "console" and "PC" will be obsolete.

What I mean by "meaningful" photorealism is graphics that hold up in practical situations, and close up as well as far away. This is much further off than most people would guess. Gran Turismo 6 on PS3 will probably be pretty close to real racing footage at times. Next gen, we might see it on human models in something like a one-on-one fighting game (they'd probably need to wear masks to cover their faces and hair though). But these are extremely limited applications. It'll be more years still before you're able to wander around a dynamic environment that appears photorealistic, and then only from certain angles and distances. The important test is going to be in an open-world game like GTA: right now GTA games lag behind other contemporary games graphically because of the amount of content they have to handle. Even then, they're totally unable to render a real city -- we don't have New York with bustling sidewalks and block-to-block traffic, with every building's interior accessible. Once photorealism is achieved on a smaller scale, the task will be to incrementally increase that scale from hardware generation to generation. There'll be plenty of opportunity for different consoles and PCs to differentiate themselves from one another at this task for years or decades after the first "photorealistic" game is achieved.

The estimate I've heard from people in the industry for when we'll get there (the point where graphics don't matter anymore) is something like 25+ years. By then, I don't think consoles and PCs will be useful terms anymore. I'm not exactly sure where they'll be at by then: maybe they'll have merged together into an upgradeable living room set-top box, or maybe the tasks we use PCs for today will be spread across and integrated into many different household items. It'll be a different world, I'm sure of that much.