Iron Mal said:
1. I find it hard to be excited by physics engines because, quite simply, as a player they do little or nothing to actually improve the game for me.
2. I can hardly even call a change like this that 'groundbreaking'. By now we've gotten about as far as we can with graphics and realistic visuals in games (now almost every game that comes out these days boasts to have 'hyper realistic HD visuals') to the point where any futher progress in this feild feels somewhat trivial and pointless.
3. This is kinda like when we tried moving from DVD to BluRay, sure, it looks kinda nice...but the changes are asthetic at best.
Gonna just dispute a few of your points here.
1. I mostly agree with you in that most games don't use physics for the benefit of the gameplay. Half-Life 2 is one of the rare gems to use physics in a responsible manner, rather than just looking pretty. The idea has potential, but needs proper implementation.
2) We are still incredibly far from true photorealism in videogames (though Uncharted 2 and Crysis are starting to get right up there.) We still need to get past the uncanny valley in the vast majority of titles, textures need to be much higher resolution, we need much more varied and complex material shaders (blurred reflections, to name one), and we need higher res models. Games today look great, but they're far from their potential.
3) Personally, I'm always stunned when people say they can't see a major difference between DVD and Blu-ray. Avatar is the most definitive title to compare (night and day difference, seriously), but if you have a good set-up, you're looking at image quality that is about 2-3x higher detail/fidelity than what is possible on DVD.