There are many changes coming about in the game industry, and the biggest one has to do with the balance of Realism vs. Fun. Realism in games does not necessarily mean realism in the real world. For example, zombies are not a common occurrence in our world (at least where I live), but are seen quite often in the Resident Evil universe. Fun is the sacrifice of realism made to give the player a more fun experience. The 3D Super Mario games (64, Sunshine, Galaxy), for example, have rather small trickles of realism, but the game overall is too unreal for players to accept as real for even the Mario universe.
A major factor in the balance between the Yin and Yang (Realism and Unrealism) are the graphics. Uncharted 2 has amazing graphics, and their realism really immerses the player. Legend of Zelda: Wind Waker has cartoony graphics that seem more fun than serious and real. So which is more fun? It may depend on the gamer and what he/she is used to playing, but many gamers both play and enjoy games like Gears of War and Katamari.
A characteristic that many times defines a game's realism are the puzzles. The Half Life games have many very real puzzles and problems. At one point in a game, you must find a way to continue the flow of electricity between two seperated wires. Putting a near-by tin can between the wires completes the circuit. This is a very good solution in the real world, if under the same circumstances with limited resources. In Lego Star Wars, if both players step on the two switches near a door, it will open. This setup is VERY unreal, as it would probably be an inconvenient security feature for an enemy base, but puzzles like this are fun, even without realism!
In fact, most people see Realism vs. Unrealism as the deciding factor as to whether a game is "hardcore" or "casual" (although there are many games that are the opposite) amongst action-adventures. The sad thing is that these two fields are becoming more and more extreme (super-realistic or extremely fake), with fewer and fewer in-betweens. This makes sense in some cases, though. The upcoming Tom Clancy's Splinter Cell: Conviction focuses on realism. Real graphics, real gameplay, real surroundings, and more and more real all promote the theme of... well, real! A "step on the large red button on the ground to unlock the door" puzzle is not going to flow with the rest of the game. If in the upcoming Super Mario Galaxy 2 game you had to find a bar of soap in a restroom, and mold it into a key to unlock the door, the entire flow of the game would be ruined, and the player would be confused. Throwing in realism, like picking a lock, to balance out the unrealism, like jumping on mushrooms to kill them, who then shoot out a coin, does not improve the game.
Another sad effect of the battle between realism and unrealism are the huge generalizations made in games. If you see a game with cartoony graphics, you will automatically think "casual". There are some exceptions to this, but it's pretty much always correct! We as designers need to ask ourselves why this is. A game with stylized graphics can have all of the realism as Grand Theft Auto 4, and a game with real graphics can have the fun of Legend of Zelda: Twilight Princess.
A great example of a mix between realism and unrealism is The Legend of Zelda series, which every game designer (current or aspiring) should play and learn a lot from about game design. It has always been on the front of evolutionizing games. The Ocarina of Time had near the best graphics for its time (it was one of the only 3D games), included realism to solve puzzles, but also unrealism. For instance, shooting a glowing light on the wall with your bow and arrow might for some reason open the door on the other side of the room (an example of an unrealistic puzzle). At the same time, jumping off of a cliff onto a huge spiderweb might break it, opening a new floor to explore (an example of a realistic puzzle).
I believe, although it would be EXTREMELY risky and most likely be a failure, if done correctly under the right setting, world, and circumstances, a game that balances realism and fun could be the sensation that the industry has been waiting for for a long time.