Yes, as games get more and more expensive to develop, they tend to get "dumber" and more mainstream. Of course, there are some brilliant exceptions like Civ 4 and Hearts of Iron 2.
Well, Civ4 isn't known for its graphics or special effects...
I would say physics, of course, will improve.
AI will probably actually start becoming difficult, instead of requiring constant "cheats".
Open-ended play will be key. More sandbox games.
A further blurring of genres, with RTS/builder games with built-in FPS/sims that can be run alongside it. Like the SimCity/Rush Hour package, but perhaps a little bit more... interesting than Rush Hour was.
I don't think it made a huge splash when it came out (and the second one has been a let down), but STALKER looks fairly promising as a future genre mix of RPG and FPS-shooter. I think (hope) the industry will evolve in that direction. It actually has a lot of the AI (modded) aspects I've seen mentioned in this thread: numerous independent, fully-functioning "individuals" interacting in a complex ALife system, trading, gaining experience, weapons, scavenging, etc. Dynamic weather, dynamic AI, events, gameplay, everything almost.
Basically,
more dynamism and less scripted gameplay. I think the future games will require a more systemic approach to design in this sense.
And stronger modding communities and a further blurring of the lines between the gaming community and dev teams.
And proper "virtual reality" tech that isn't excessively heavy, clumsy, and expensive. This is already the case with hardcore gamers (full air sim setups with TrackIR, for example), and I expect in a few years it will hit mainstream, or at least a sizable minority thereof. The price just needs to come down first, and then the slow uptake and game support process can begin.
And a new idea would be something akin to mixing gaming with forums. Not quite Second Life, but similar in a sense: basic virtualization packages that can be run on certain widely-shared board scripts, like an MMO type program that runs on local advanced BBCode. All probably open-source. Really, I don't know why it hasn't happened yet...