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Game Developers' Quest To Cross the Uncanny Valley
Nerval's Lobster writes "Nearly 30 years after Super Mario Bros., video game graphics have advanced to heights that once seemed impossible. Modern sports games are fueled by motion capture of actual athletes, and narrative-driven adventures can seem more like interactive movies than games. But gaming's increasing realism brings a side effect — a game can now fall into the 'uncanny valley,' a term coined by robotics professor Masahiro Mori of the Tokyo Institute of Technology in 1970. Jon Brodkin talked to game developers, engineers, motion scientists and a variety of other folks about the 'uncanny valley problem,' in which (some) people feel revolted when confronted by a robot or digital character that doesn't quite look real. In games where human-like characters are necessary, the uncanny valley can be an even bigger problem than in animated movies; gamers control characters rather than just watching them, creating more opportunities for the illusion of realism to falter. New and better tools can help developers and animators deal with some of these issues, but crossing the 'valley' successfully still remains a challenge. Or is crossing it even possible at all?"
You are looking a little too deeply into this in hopes of finding something offensive.
"Interactive Movie" was actually traditionally used by the games industry back in the early days of digital video when they would incorporate it into a "game" but there wasn't enough game to actually call it a game, like Night Trap.
In modern context, it simply means a game that is so realistic that it would be indistinguishable from a motion picture visually, if one could choose character actions during a motion picture. It's an aspirational goal of the game industry, not the film industry trying to hone in on the games industry.
That said, the real issue with realism in games is that game developers keep pushing the envelope in the wrong direction. Even on the next gen systems (well, since they are out I suppose they are now current gen), they keep focusing on textures and increasing numbers of polygons on the screen instead of making what is there more realistic. I am always stunned when I see a brand new game and they STILL cannot get lip sync right. It doesn't matter how detailed the hairs on a characters head are if their lips don't move in sync with their voice.
not about people being "revolted" because they sense something "wrong" on an unconscious level, it's that they spend so much time trying to increase resolutions and textures that they don't focus on what makes characters alive - how they move and how they react. It's not about making single frames look more realistic, it's how they work in motion which really hasn't improved in step with the "how many hairs or pores can we texture on to this character".