Graphics have been pushed pretty far all ready, and even with '3D' to help allow them to go farther I do not see there being enough advantage to offset the costs in going much farther till holograms (or virtual reality where it seems you are in the game world) are the standard display for games.
For games in general, the way forward is to have more game in them. This means more content, more/better/new types of gameplay, games that vary more in how they play in each play through (more random elements, particularly adding randomness to games with a strong story without hurting the story), and more imersive gameplay (making it feel like you are in the game, one thing that I think would really help would be things related to gameplay that cannot be expressed in numbers*). There is no one way to achieve these things, but without them games will never really progress.
* Mind reading is a step in this direction. It and other abilities like it (diviniation and wish in Baldur's Gate) help because they do not feel as mechanical as other abilities. In relation to RPGs, another area that I would like to see improved in this way is equipment. Currently the choice of equipment comes down to stats and how it looks. Specifically I would like to see sentient items that are an NPC in their own right.
Finally since it is interactitve games, motion (and other) controls should be addressed. The main thing for doing well as new controls enter the market is games need to really use them to there full advantange. An example of failing to do so is making a sword fighting game for the Wii (using the WiiMote) and having it play like a game made for a more tradition controller. Such a game should track the exact movement of the WiiMote for the movement of the weapon. On a similar note, the older forms of control should not be ignored in favor of what is new. Games should adept to work with many controllers and take full advantage of what each has to offer.
