The graphics have gotten quite good, although I would've expected to see much better by now, and I think they started stagnating on visuals in the past 5 years (after Crysis) because of the rise of laptops, which are replacing PC's for most people.
But still my main disappointment was with how unrealistic the movements of the characters are. The characters "look" pretty real, but then that idea gets completely ruined by the way they move. It kind of ruins the experience.
Take Skyrim for example, great visuals overall, especially for the environment, but I hate the way the character moves and how it fights. While the visuals make you think you are in 2012, the movements make you think it's still 2003, the year of Morrowind.
I think a huge part of the problem isn't a sudden move to laptops, I think it's that the current generation of consoles is seven years old, and major developers (i.e. those with the resources to innovate) tend to design with the console in mind these days.
For anyone who played Bad Company 2, I think Battlefield 3's destructible environments were a bit of a letdown: the levels got more complex but they really toned down what you were allowed to destroy (a wall here, a wall there, etc). I'm not exactly sure why they did this.
I agree that the current generation of consoles are holding us back. I can't wait to see what kind of games we get on next-gen hardware, I just hope it happens without too much of this online-required nonsense that seems to be becoming the craze..
Facial animation I just wish they went back to Brütal Legend because they were cartoony, but the most expressive faces I've seen in a game.
LA Noire was just rubbish in every way.
But you don't really have many AAA devs planning on running their game on laptops.
It seems like such a simple thing, and I'd rather have a game get that right than render a realistic mustache. A quick check of a trailer on YouTube seems to show that Madden 13 still doesn't have it, and it breaks the immersion every time I see it.
Backbreaker [1] did it two years ago, and it looks so much better to my eyes because of it.
If both teams mastered the other's strengths, the resulting games would be nearly perfect.
I haven't played Skyrim so I can't really comment on that. Oblivion had fairly decent character animation but it was mired by moon-physics: NPCs eagerly charging down stairs (or off a small ledge) to engage a foe would sort-of float and there would be this "running in the air" effect that was especially noticeable at the very beginning of the game.
Like when humans are talking there are lots of tiny little movements all the time, even when we intend to stand mostly still. When a character in a game moves his arm it goes from point A to point B, stops immediately, and doesn't affect much of the rest of the body.
Realism is interesting, but like you say - it's not always going to be as much fun.
At least I do. The damage model may not be as realistic, but my cars rarely stay in proper shape for as long as 15 seconds.
Partly because wrecking cars is 70% of the fun in GTA...