Since their inception, video games have had two key limitations: hardware capabilities available at any given time, and developers' abilities to work around hardware limitations and use them to full effect. This allows for surprising moments when games come along which, at a technical level, seemed impossible to pull off, and has also facilitated the sustained evolution of gaming. In fact we have reached a stage where photorealism in gaming is tantalisingly close.
Gaming consoles have also played a key role in the evolution of gaming. I know many of us prefer PC gaming, however consoles have played a vital role in driving the industry forward to such an extent that currently they are the industry heavy-hitters that control development cycles. Gone are the days when games were created exclusively for PCs, perfectly in sync with their hardware capabilities. Nowadays it's all about the latest must-have console, and this carries some very clear consequences.
Consoles have had very positive effects on the gaming world, however they have also had negative effects. Game development life cycles have lengthened considerably. Add this to development being centred exclusively round consoles, and the results are a failure to capitalise on cutting-edge PC hardware and a slowing down of video gaming's evolution in a wider sense.