How can Xbox and Playstation possibly improve their game graphics?

Though video games have come a long way since the days of ColecoVision and Atari 2600, whenever I see the game graphics on today's systems like Xbox 360 or PlayStation 3, I always wonder, "How can they possibly improve the graphics"?? They already look so real sometimes you feel like you're actually playing a movie not a video game. It's like if you see a drawing or a painting and you swear it was a photograph. Can't imagine how game graphics will look 5 or 10 years from now.