Sports titles, such as Madden, due to their attempt to simulate a sport, and attempt to add new features and balance them with playability.  With First Person Shooters, there isn't any sort of simulation involved here.  So, I don't see why there would be a need for what you have with sports titles, where they are also new rosters. 

But, maybe there are things left that need to be done.  On that note, I would have to ask, what does Halo, Call of Duty, Battlefield, or other FPS titles I mention need to have done with them, and new features they need added?  What is needed to be added that couldn't be addressed with either an expansion pack or a patch?

So, why aren't FPS now where music games or driving games are?  What other work is left for them to improve upon?

FPSs are definitely simulations, the entire point is to be a physically correct model of the real world.

Plenty left to do - better, more realistic physics and graphics.  It won't be done until you cannot distinguish between a real video recording and a fake game world.  FPSs are at their limit right now because of hardware limitations.

So, how much of a simulation are Call of Duty and Halo?

halo isn't a simulation and doesn't try to be. Its a somewhat overthe top shooter where the combat is exciting and fast paced. CoD originally tried to focus on being a simulation but people wanted super accessable shooters and so thats what it ended up becoming. "Realistic" shooting games won't expand much except improved ai, but games like bioshock, resistance, and halo have great freedom in adding new mechanics, features, enemies, ai, etc. to improve gameplay. Graphics are pretty irrelevent in shooting games as they have gotten to the point where every game looks nice and thats really all thats needed.

Simulates lighting, physics.  Even if most of it is approximated, there will come a time when they will use more robust modeling.  More realistic destruction, material and particle physics so when you blow up a vehicle real pieces come off of it.

COD and Halo, like all current gen games have very elementary lighting and physics models.  Future 3D engines will probably move to real time ray tracing.  Intel has a real time demo and they are right now toying with using cloud computing on 32 core processors to do it.

There's only so much you can do with patches. I guess expansion packs are an option though (maps, guns, large updates, etc.).

I guess the main reason for new games are graphical/physics improvements as well as the new single player campaigns and what not. Even though CoD4 is still playable today, MW2 is a huge improvement graphically and a lot more can go on at once without the framerate dropping at all. 

That said, I would love to see maybe a 2-3 year cycle between CoD games, with the gap closed off with expansions and constant updates. That could be a win-win situation. The publisher makes lots of money off of expansions/DLC and we get more content without dishing out $60 for a new game each year that's barely an improvement. 

Shooters need to become more fun to play. Because right now you have your simulators which are basically world army simulators that have been released as games eg ARMA2 etc. And you play them and they are boring for many (I enjoy the heart racing moments after running for an hour) then you have your shooter that are in between and they suffer trying to be inbetween because they dont know which way to go which breaks games for example: you might get an shooter going for the "War is Hell" setting but have you absorbing bullets and destroying an army by your self with over the top weapons an it fails and could of been better if the setting wasn't so serious. 

Developers need to make Fun exciting games games that offer more challenge but that challenge is fun to do which is failed in so so so many recent shooters. There is no challenge in call of duty's single player which combined with being poor written, structured and overal below average experience the worst is due to the lack of challenge and the fact you are being held forcefully though the levels. 

What shooters need to improve on is:

Fun: many developers have lost the plot here and dont know what fun is anymore. 

Unlinear: is war fought in cooridoors and small staight fields? no but open world games aren't the best but what happen to you can solve it by doing it all these different ways.

Better stories: stories in shooters are becoming jokes: enough with the US, sure they are an super power but the stories for games involving the US are bad. 'US gets invaded by X', 'US invading generalisationstan', which end up being an group of 4 men destroying countless number of enemy forces its over done and lame. They should have more interesting stories 

Stop comparing first-person shooters to plastic guitar rhythm games.

The yearly installments of COD differ more than the yearly installments of many, if not all yearly sports games. There's a new campaign, new weapons and new online modes. There's also tweaks to the engine, so it looks and plays better. These changes could not be added simply by a patch, and it would not make sense from a business stand point to do so.

The FPS genre is more flexible I would imagine in terms of creativity than say the music playing genre. While the music genre pumped out yearly installments of games that had little to no difference between them save the music list, the FPS genre is always experimenting, adding and looking for something new. It's also the most popular genre in gaming at the moment, and has some of the most talented studios developing in the genre.

Future improvements this generation would simply be more features. Add co-op, or online co-op, or 4-player split screen, or exciting new modes or even dinosaurs. Anything new really.