As shown in this real time tech demo by Epic Games Unreal Engine 4, there are a host of improvements coming to the next generation of console and PC games. These are notably, real time dynamic lighting and particle effects as well as massive improvements to the UDK itself, enabling developers to leverage all these improvements much easier and faster. Then, just to show off Square-Enix, creaters of the hugely popular Final Fanstasy series, go and show what their latest real time tech is made of, and that really is impressive.
Now, if you've just watched the demo from Square-Enix then I'm sure you appreciate it, but they themselves admitted it to be “running on a pretty high end PC”, and we all know what that means. This is the kind of spec that the next generation of consoles are fairly certain not to have, so unless either a lot of system optimisation happens, or the developers really pull something out of the bag, I don't think these are the type of visuals we'll be seeing.
In short, it's as impressive as the demo from Square-Enix. I have a feeling that Unreal Engine 4 will be much closer to what we will actually get on the next generation of consoles, and with AAA developers already working with Epic Games' tech (such as Gearbox Software on Borderlands 2 and Arkane Studios on Dishonored) then the future really is bright for games.