Not too be too down on BBC News, but their tech guys are idiots. Complete and utter maroons.
They've got this article about how, according to the industry "experts," we are at most two years away from photo-realistic humans. Which is total nonsense. We may be two years away from photo-realistic movement, but that is not the biggest challenge standing in the way of photo-realism in games.
That, hands down, is skin. Human skin absorbs and scatters light in a way that we don't really have the technology to do, even in pre-rendering, let alone real time. You'll notice that a lot of games, like Oblivion, with high quality graphics have characters that kind of glow. It's a way of tricking you into letting computer people be pretty, and not freakish. We may not be able to simulate subdermal refraction, but we can at least make people glow!
That's not my favorite part, though. My favorite part is down at the end. After the article has made a big deal about how, in the future, computer characters will be totally indistinguishable from humans, it quotes Ian Livingstone of Eidos: "We will be able to play with people's emotions - we can make them laugh, we can make them cry, we can make them sad."
Because, y'know, you totally can't affect people emotionally, unless your characters are totally, perfectly human. We're totally impervious to anything that doesn't look 100% real. Without the perfect visual experience, without being able to see every nuance of the characters action, no one ever feels any connection to a story.
Because no animated movie, or novel, or radio show has ever made anyone feel sad.
Honestly, I think that games would be better off if they went less realistic with their graphics. Not lower quality, mind you. Just less realistic. Characters drawn with broader strokes can actually be more effective, emotionally, because it's for people to invest in them. It's easier to imagine them as being exactly what you want them to be.
Eventually, computer games are going to figure out that there are other kinds of art out there. Naturalism isn't the only way to make pictures look good. Someday, video gaming is going to discover impressionism. And they're going to realize that suggesting an image, and capturing a feeling, and making it really pretty, are all way more important goals than "realism."