I think VR is going to win the day and not just for games, but life in general. Think about porn. Instead of watching two girls go at it on a couch, you will be able to be a foot away, IN THE ROOM that the scene was shot. You can apply that to just about anything as well. Want to visit Rome but don't have the money? Strap on the VR and bam, you're walking the streets of Italy. 

People are going to use VR to drop out of life much in the same way they do drugs, or drink on the weekends. 

In 20 years, probably still no fiber everywhere plus plenty of bottlenecks in the ageing infrastructure. If net neutrality doesn't make it, prepare to pay a premium to get your game and movie streams.

VR will have hit its stride. But the crude cellphone screen taped before your eyes will have been replaced by VRD glasses, projecting the image directly onto your retinas. Together with pupil tracking this can provide correct depth vision and vastly save on processing costs as it can optimize the image between what's sent to the fovae and your periphery vision.

Home consoles will still be needed as VR depends on ultra low latency. The game might still be streamed but the final image processing (head position, eye rotation+focus updates) need to be done client side.

What else can happen in 20 years. Maybe some breakthrough in thought control devices. When you already have a VR headset on, thought control becomes easier to add. Selecting in game items by thought control could be great.

Will 20 years be enough to carry on a conversation with AI characters? It's been a dream since computers were first invented. Walking around in VR and simply being able to ask directions from an NPC instead of bringing up menu selections will be a big step forward.

You don't need all that, just some electric pulses directly into your pleasure center

After thought control, neural feedback, direct stimulation of the brain.

All the same with better graphics.

Mario and Zelda are pretty much the same 30 years later.

I remember an old issue of EGM that spoke of the future of gaming. I may be able to dig it up. It was from 1999 or something. Anyway, virtually none of the futuristic ideas they had came to pass. Better graphics. Refined gameplay. That's it.

And prostitue probably, think about it, you get free girls without having to give them anything... though at the same time, if you owned your own, you wouldn't need a prostitue.