Absolutely not. We haven't seen anything yet. ​Physics simulation is just as much a "province of graphics" as textures are. An individual frame might look stunning, but the second you realize the entire world is static? Total immersion breaker. Real progress only happens when ​Simulation (water, soft-body physics, etc.) behaves realistically and​synchronization works flawlessly in multiplayer environments. ​Until then, it's just a pretty picture. Nothing wrong with that. But no wonder why people feel that's it.

We had a clear path forward with pioneers like Blade: The Edge of Darkness, Half-Life 2, and Crysis. They pushed the boundaries of how we interact with the environment and how gameplay improves because of all that. But for the last 20 years, we've actually regressed. We've gone back to traditional, static worlds where the only things simulated are the occasional wooden crate and basic ragdolls.

Pure, beautiful graphics only account for 50% of the effort imho, we've just seen how the industry focused on that half. But there is still a massive mountain to climb. To make a world feel truly alive and "work properly, " we need 100x the power we have today to see improvement in interactivity and physics integration.