History of computer games take 3

So we've seen how game have come to be a household name amongst not only children but now evermore so, older gamers .Even the likes of pensioners thanks to Nintendo's innovations. But with so much changing in only the past 30 years were do we go from here. Has the visual impact of game visuals reached a limit of can we expect to blur the line between what's real and what's virtual? I believe virtual reality is not so many years into the future and may take over this new idea of revitalising old 3d technology that's becoming very popular in cinemas and even more so with computer game now that new monitors have the ability to hit 120hz refresh rates and Nvidia's vision glasses. Not so many weeks ago I watched Ortis on the gadget show to a piece on “the future of gaming” http://www.youtube.com/watch?v=A4KZRQjCMOA&feature=player_embedded . If games got so real could we expect to see a ban or restriction on graphical content or would the evolving mature of what we as humans see, pass judgement on what we now call inappropriate. Look at what would have been classed as scary back in the 50's and 60's (the blob 1958). In 50 years time can we expect a life like war simulation as close to real life as it can get without actually being on the front line nothing more than entertainment. Or how about fooling our brains into different senses like smell and tough. What about the training implementations for example, firemen could do drills on real life locations. Actually feel the heat from the flames and feel the force of the water coming from the hose. Or people could experience flight like superman and have the sense of the air blowing past them.
So were does this take the industry and what can we expect it to demand from us in the future? In the last 20 years the learning curve for developing game content has got higher. New ways to add realism involves more work, but does that create more jobs? Games today rival some of Hollywood's biggest films. The integration of cinematography for example. I was reading an article on a website, Gabe Newell from Valve was talking about how the Team Fortress 2 shorts had helped Valve develop there ability to create film. Then how its applied to there intro of Left for Dead and now in my opinion even more impressive is the intro for Left for Dead 2. They look cool and are entertaining to watch, but there purpose is nothing more than a tutorial for game mechanics when playing the game. In a different light the developers of the new red faction game made there physics engine so accurate that the mapping team had to almost learn to become architects when they were designing building because all the structures in the game can be destroyed. But if the structures weren't able to support themselves they would simply fall to the ground before the player was able to do it themselves. So are these drastic measures games company's need to do to keep the industry fresh and exiting, or is it a natural progression of development for artists? If it is then us budding, new game artists have a lot of catching up to do!