I agree with most of the things guys here have said, but I have to disagree on the "graphics is not improving because it is already great" bit. The problems is, the graphics is NOT great. Everything still looks so obviously horribly FAKE that nobody who has remotely healthy eyes can mistake it for actual reality. When I look at my house, I don't see clipping textures and shitty anisotropic filtering, I see actual detail. Same with human characters, they can have facial hair and all yet they still look a lot less realistic than Madam's Tussads vax figurines.
It is easy to say "this is as good as it gets" when there is nothing better in consumer realtime graphics, a quick look at some pathtracing realtime demos http://raytracey.blogspot.sk/ or even just the PS4 Dark Sorceror demo http://www.youtube.com/watch?v=4j5xxi6cjjU shows just how pathetic the graphics of most recent games are.
Remember, plenty of guys thought "this is as good as it gets" in the SNES era. Same with later eras, PS2 promised Pixar quality, Geforce 2 promised Pixar quality ... all bullshit. The Xbox Shrek game was hyped to look "just like the movie". Transformers quality scenes took 36 hours to render and Pixar scenes still usually take several hours. No way does a current gen game running at 30-60 fps deliver ANYTHING close to "Pixar level quality", because then I can say that the Jungle level in Goldeneye N64 is "Crysis quality". Pixar quality graphics is a pipe dream until computer development starts being quick again like in the 90s.
I am not some "retro hipster" who jumps on the "new games suck as a rule" bandwagon. I rather think that the 2006-2013 era has been the next "multimedia" 1991-1995 era. Just like 1991-1995 produced dozens of atrocious unplayable FMV games that everyone shuns now yet they were "ooh" and "aah" all over it when it was the "cool new thing" because "A game based on real video. SO FUCKING REAL.", the present day is characterised by shitty military shooters with an atrocious visual style and an overuse of GPU effects, along with MMORPGs that are becoming more of an addictive drug rather than a pastime. There is more than a passing resemblence, as the new shooters are becoming so linear and scripted that they begin to approach Sega CD FMV trainwrecks in terms of lack of interactivity.
My little hypothesis is that it is caused by the same thing that caused the FMV shitstorm in the early 1990s. - one aspect of technology being developed too much while others stayed underdeveloped. In the early 90s, suddenly, 386SX crappy computers and 16-bit consoles with very little CPU grunt got CD-ROMs, and storage multiplied by 100-600x. The question: what to do with it? The answer: let's put hours of shitty 64 color 15 fps video on it and call it a game! Only after realtime 3D rendering became more mature starting with the 3DO/Sega Saturn/Playstation/486DX2 because of increased CPU/graphics power did this 700 MB space became utilized properly.
Same applies to modern day. GPUs are becoming far more powerful than the CPUs that command them, while most games are still DVD sized. Thus, we get games with tons of effects, miserable AI, miserable, linear gameplay and no new ideas.
Let's just hope this era ends just like the FMV game era did; by gamers collectively saying BOO to another new Call of Brofare game (because having a DOG in game with a scar on his ear is so fucking original and fantastic, also, LEAN FEATURE ON CONSOLES)/ another "HD remake"/"gritty reboot" just like the BOOd the FMV shitfest and games like Quake and Magic Carpet started coming out, dooming stuff like Sewer Shark to oblivion.