If you think that rendering has peaked, it's probably good. Probably it means you're not too old and haven't lived through the history of 3d graphics, where at every step people thought that it couldn't get better. Or you're too old and don't remember anymore...
Really, if I think of myself on my 486sx playing Tie Fighter back then, shit couldn't get any better. And I remember Rebel Assault, the first game I bought when I had my first CD-rom reader. And so on and on (and no, I didn't play only Star Wars games, but at the time LucasArts was among the companies made all must-buy titles... until the 360 I've always been a "computer" gamer, nowadays I play only on consoles).
But but but, these new consoles launched and people aren't that "wowed" right? That surely means something. We peaked, it happened.
I mean, surely it is not that when the 360 and later PS3 came out games weren't looking incredibly much better than what we had on ps2, right? (if you don't follow the links, you won't get the sarcasm...). And certainly, certainly the PS2 launch titles (was touted as more powerful than a SGI... remember?) it blew late PS1 titles right out of the water. I mean, it wasn't just more resolution.
Maybe it's lack of imagination. As I wrote, I was the same, many times as I player I failed to imagine how it could get better. To a degree I think it's because video-game graphics, like all forms of art, "speak" to the people of their time, first and foremost. Even if some art might be "timeless" that doesn't imply that its meaning remains constant over time, it's really a cultural, aesthetic matter which evolves over time.
Now I take a different route, which I encourage to try. Just go out, walk. See the world, the days, the nights. Maybe pick up a camera... How does it feel? To me, working to improve rendering, it's amazing. Amazing! I could spend hours walking around and looking in awe and envy at the world we can't yet quite capture in games.
Now think if you could -play- reality, tell stories in it. Wouldn't it be a quite powerful device? Won't it be the foundation for a great game?
Let me be explicit though, I'm not saying that realism is the only way, in the end we want to evoke emotions, and that can be done in a variety of ways, I'm well aware. Sometimes it's better to illustrate and let the brain fill in the blanks, emotions are tricky. Take that incredible masterpiece that is Kentucky Route Zero which manages to use flat-shaded vector graphics and still feel more real than many "photo-realistic" games.
It's truly a game that every rendering engineer (and every other person too) should play, to be reminded of what are the goals we are working for: pushing the right buttons in the brain and trick it to remember or replay emotions it experienced in the real world.
Other examples you might be more accustomed to are Call of Duty (most of them) and Red Dead Redemption, two games that are (even if it's very questionable actually) not as technically accomplished as some of the competition but manage to evoke and atmosphere that most other titles don't even come close to.
At the end of the day, photo-realism is just a "shortcut", as if we have something that spits realistic images for every angle and every lighting, it's easier to focus on the art, the same way that it's cheaper to film a movie rather than hand paint every frame. It's a set of constraints, a way of reducing the parameters space from the extreme of painting literally every pixel every frame to more and more procedural models where we "automate" a lot of the visual output and allow creativity to operate on the variables left free to tuning (i.e. lighting, cinematography and so on).
It is -a- set of constraints, not the -only- one. It's just a matter of familiarity, as we're trying to fool our brains into firing the right combinations of neurons, it makes some sense to start with something that is recognizable as real, as our lives and experiences are drawn from real world. But different arguments could be made (i.e. that abstraction helps this process of recollection), this would be the topic of a different discussion. If your artists are more comfortable working in different frameworks there is a case to be made for alternatives, but when even Pixar agrees that physics are a good infrastructure for productive creativity then you have a quite strong "proof" that it's indeed a good starting point.
Diminishing returns... It's nonsense. Not that it doesn't exist as a phenomenon, but we are still far from being there in terms of effort vs quality, and there are many ways to mitigate it in asset production as well (money vs content, which will then hopefully relate to money).
As I said, everyday I come back home from the office, and every day (or so) I'm amazed at the world (I'm in Vancouver, it's pretty here) and how far we still have to go to simulate all this... No, it's not going to be VR the next step (Oculus is amazing, truly, even if I'm still skeptical about a thing you have to wear and for which we have no good controls), there is still a lot to do on a 2d screen, both in rendering algorithms and in pure processing power.
Yes we need more polygons please. Yes we need more resolution. And then more power on top of that to be able to simulate physics, and free our artists from the shackles of needing to eyeball parameters and hand-painted maps and so on...
And I don't even buy the fact that rendering is "ahead" and other things "lag" behind. How do you even make the comparison?
AI is "behind" because people in games are not as smart as humans? Well, quite unfair to the field, I mean, trying to make something look like a photo, versus something behave like a human, seems to be a bit easier to me.
Maybe you could say that animation is behind because well, things look much worse in motion than they do when they are static. But, not only part of that is a rendering problem, but it just says exactly that, things in motion are "harder" than static things, it doesn't mean that "motion" lags behind as a field...
Maybe you can say we implemented more novel techniques in rendering than we did in other fields, animation didn't change that much over they years, rendering changed more. I'm not entirely sure it's true, and I'm not entirely sure it means that much anyways, but yes, maybe we had more investment or some games did, to be more precise.
Anyhow, we still suck. We are just now beginning to understand the basics of what colors are, of what materials are, how light works. Measure, capture, model... We're so ignorant still. Not to mention on the technical side. Pathetic. We don't even know what to do with most of the hardware yet (compute shaders? for what?).
There could be an argument that spending more money on rendering is not worth it - because spending them on something else now gets us more bang for the buck, which is a variation of the "rendering is ahead" reasoning that doesn't hinge on actually measuring what is ahead of what. I could consider that, but really the reason for it is just that it's harder to disprove. But on the other hand, it's also completely random!
Did we measure this? That would be actually fascinating! Can we devise an experiment where we can turn a "rendering" know and an "animation" or "gameplay" know and see what are people most sensitive to? I doubt it, seriously, but it would be awesome.
Maybe we could do some market research and come up with metrics that say that people buy more games if they have better animation over rendering, but... I think rendering actually markets better (that's why companies name and promote their rendering engines, but not their animation ones).
Lastly, you could say, it's better to spend money somewhere else just because it seems that rendering is expensive and maybe the same money just pays so much more innovation somewhere else. Maybe. This still needs ways of measuring things that can't be measured, but really the thing is some people are scared that asset costs will still go up and up. Not really "rendering" costs, but "art" costs. Well -rendering- actually is the way to -lower- art costs.
No rendering technique is good if it doesn't serve art better, and unfortunately even there we still suck... We are mostly making art the same way we always did, triangles, UVs, manually splitting objects, creating LODs, grouping objects and so on. It's really sad, and really another reason to be optimistic about how much still we have to do in the future.
Now, I don't want to sound like I'm saying, I'm a rendering guy, my field is more relevant and all the money should go to it. Not at all! And actually I'm passionate of a lot of things, animation for example is fascinating as well... and who knows, maybe down the line I'll do stuff that it's completely different than what I'm doing today... I'm just annoyed that people say thing that are not really based in facts (and as we're at it, let's also dispel the myth that hardware progress is slowing down...).
Cheers.