They don't doesn't mean they cannot. Even if Playstation 9 comes out, if the developer choose not to be photorealistic than the games will just be stylish graphic instead photorealistic (which is i don't mind). And yes there is always be a new bar in each new generation, but the bar will not be noticeable from now on. The problem is not the technology it self or the spec, but more of our limitation on seeing a higher resolution more than 16K. In games we don't need an artist rendering every atom and particle of our skin. So the goal on physical based rendering already achieved (except it just need a proper Ray Tracing)

But the point to my comment is we are already in the situation where photorealism on gaming will be hard to notice on each generation onward. Instead Developer will strive for physics and world interaction to create a living world and also they will focus on AI and simulation. There is so much to improve on games and that's not just photo realisme. 

Yeah we're not even close to photorealism on consoles. Wake me up when consoles reach Pixar quality of animation.

This is photorealism. Granted it takes millions of dollars and hundreds of man hours to produce.

This is pretty interesting video, if you want to delve into photorealism

Yes PS3 to PS4 is the peak evolution, we still can see the difference. But from PS5 to PS6 onward , we will just be seeing increasing of resolution and performance  , the rest of the hardware probably will be  focusing rendering the amount of object or character in one area.

If you want to see the end goal of photo realism is,  just look at  FF7 remake character model that has the same quality with the CG model in FMV CG scene or Resident Evil 8 in game model character which already using photo geometry using real human model

I don't know what else we can achieve beyond realism, current gen can already render realistic model with the exact same features . What only lacking this gen is proper lighting (Ray Tracing ) and animation and also proper physics and simulation . 

Yeah, but at what point it doesn't make sense to pursue more graphics? Making great graphics is great and time consuming, and at certain point most people are not going to care above a certain level of detail. How viable is the continued increase of graphical capabilities after a while?

I will just say that you need to look CGI thread to see how much of a jump we are going to have.

Sure every gen the jump seem smaller because there is the ceiling (that we will still take decades to achieve) but sure everytime we get nearer there is less road to cover. But it is still very noticeable. And I'm not even thinking about the bad stuff like pop ups, collision and things like that.

I have seem the CGs from FF7 and I can still easily see the gap. Even if my relatives when I'm gaming ever since PS3 ask if I'm watching a movie.

Once we really achieve photorealism we will still have other stuff to achieve. We are at something similar to people going from B&W tv to color tv thinking they didn't need anything more and it wouldn't be possible to improve that 21" CRT because they were already seeing images that were life like.

That's CGI , games does not required to render every atom and particle of each object. Current gen hardware can already achieve cheap way to render the graphic  for gaming purpose. 

Exactly, so are all computer graphics look at how far we've come from CGI in movies from 10-20 years ago. Techniques get passed down and technology moves on. We are nowhere near photo realistic graphics. Just look at the art and animations created in blender its astonishing like real life in some cases.

Anyway watch the below video, its a good explanation to what photorealism means today.