Many may say that the difference between the current gen consoles and the previous generation is bigger than what the difference between current generation and the next will be. I think that's only true resolution-wise. Here is one very good reason:
No resolution-jump: Take a look at the, for example ps1 and the ps2. Although the ps2 were capable of higher resolutions, most games were in 480p since most TV:s at launch, weren't capable of handling higher resolutions. Therefor the graphical enhancements were put into other things than resolution. Today all new TV:s can handle 720-1080p, at least in the wealthier parts of the world. This will mean that the next gen console won't focus on outputting a resolution higher than that, although this will probably added through a firmware update if a new resolution becomes standard in the lifetime of the next gen consoles.
So what does this "no resolution-jump" mean for the graphical quality of games? It means a lot, and I am no professional, but I can describe a few things.
Tessellation: This is a great, computational power-saving feature. This will greatly enhance the drawing-distance, among other things, in the next gen. Tessellation is a DirectX 11 feature for PC's today. Some Tessellation can be done today on consoles, but not to the extent that it really matters. This is a feature that will be present in the next gen.
Possible ray-tracing: Ray tracing is not only good for simulation of lightning, but the algorithm used opens new doors to parallelization(which basically means better performance from multi-core devices). More calculations per cycle can be done and the more calculations, the better the graphics. Basically. Please correct me with comments if I am wrong^^ As I said, I'm no professional.
The return of SSAA: SSAA (Super Sampling anti-aliasing, also known as full-scene anti-aliasing) was cut from graphic-cards with the arrival of DX8 due to the amount of computational power required. It has been enabled again in the current graphic-cards, but are almost exclusively used on older games due to the cost. SSAA provides the highest quality image of all current anti-aliasing techniques and with the progress being made in computation today, this is a feature that might finally be brought to consoles.
Stereoscopic-splitscreen: 3D with glasses is stereoscopic 3D. Stereoscopic-splitscreen will make it possible to play more than one person on the same TV without having to split the image in two. I know that Sony filed a patent for this a year ago or so, (or was it 2?), but I'm sure Microsoft will find a way to do it their own way. This is a feature that is NOT possible without glasses.
The next gen will bring the long awaited 1080p 60fps -games. It will be a minimum for most games. If there is no increase in resolution the added computational power that the next gen will bring has to go somewhere, into features like the ones I mentioned above. Please add your own thoughts about new graphical features in the comments below :)
Cheers! / A
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Hey, I like your thinking. Makes sense to me.
I still think there will be those Developers who want to push the limit, and go for the higher resolution even if a small sub section of gamers have a TV capable of displaying it. (That of course is assuming TV sets will be sold that support higher resolutions during that time).
But the majority will take advantage of that extra processing power in the ways you've mentioned. Maybe even greater Physics engines.
I think the next gen Xbox and Playstation will be released in late 2013. I don't think they will use cutting edge tech (to reduce costs), but they won't need to as the use of a superior CPU/GPU combination with about 2.5 or 3 GB of ram (shared with CPU/GPU) will produce much better results at a relatively low price. The use of the graphical effects you describe should be achievable at native 1080P with high frame rates. I don't think that Microsoft or Sony will aim to produce a graphical powerhouse anyway as I think they will be aiming for a $299 (U.S.) pricepoint at launch and look to break even so profitability increases at a faster rate. I think that software, multimedia functionality and motion controls will be more important anyway as all the next gen consoles should be graphically very impressive which won't provide a point of differentiation like the current consoles.
The irony is all the items listed above in this article for "NEXT GENERATION CONSOLES" are already ALL ACCOMPLISHED ON THE PC right now and have been for the past 5 years.