Wirdschowerdn
Ph.D. in World Saving
Good thing they're working on making Middleware and APIs to make it easier on all of that e.g.:It's all interlinked. You want something to look better? Then you also need better animations, more physic rigs, better behaviour etc. in order not to break the illusion of a realistic world. It will be inevitable that this will extend development time and cost....and yet, the end result will just be "another bland and shit game" thanks to academically educated game designers (game design schools lol) who never bothered or learned to think outside the box.
Animations (ANT): http://bf3blog.com/tag/ant/
Vegetation and plants (SpeedTree): http://www.speedtree.com/
Post Processing (YEBIS2, mentioned in the first post): http://www.siliconstudio.co.jp/middleware/yebis/jp/
UI (Scaleform): http://gameware.autodesk.com/scaleform
AI (look at the second CryEngine 3 video about AI above)
There's even stuff for face caption (L.A. Noire, newest Quantic Dream game etc.) or lip-sync (I think Valve already did that with Source)
etc.
There's always technical solutions for problems.
And again, scaling back shit for 7-10 year old hardware with 256MB dedicated graphics RAM and making it work above 30FPS also costs money and manpower, a lot actually.
I'm not sure "cause stuff gets more expensive/complicated" is a proper reason for technological stagnation, now already going for almost ~7+ years with some hardware parts/specs in the consoles being on the level of 10 years ago.
Developers have a brain and can decide in which way they want to make a game, what amount or graphical detail, what engine, if it's 2D/Retro, 3D or whatever and they should use it instead.
Some of them being retarded and deciding to only make "AAA flashy game" because they want to be moar like War of Gears or Call of Doody and then going bankrupt isn't exactly a reason to halt technology forever...
Small/Mid budget Indie games as well as "AAA productions" can both coexist as the likes of Minecraft prove and we're still getting Wasteland 2, Double Fine Adventure and Shadowrun Returns.
Look, that's all nice and dandy...but just look at the leaked PS4 specs. AMD "Steamroller" Quad-Core? Are you kidding be? That's actually a step down from the Cell. But at least it's supposed to have a AMD 7970 GPU that can render us those flashy graphics! Wow! But it probably can't even calculate a physics based game like LBP anymore.
Uhu. So far for having more progress.
And let's not forget that Epic Games right now has huge input in the determination what hardware gets into the box. You know, those guys who make those flashy engines, but nothing else.