I found myself asking this very question a few days ago, when a friend brought to my attention a few GDC videos of the Witcher 3. They displayed a lot of the technical details that have gone into their art pipeline, how they handled producing huge pieces of land, all strewn with incredible texture resolution, tessellated geometry that adapts around the player, and absolutely gorgeous lighting across long distances.
Adapt my pretty polygons, ADAPT!
Individual characters were given huge attention as well, featuring a monster, horse and wolf with hair so detailed it matched pre-rendered hair systems I'd seen in Maya, blowing based on the direction of the wind in-game.
Naughty Dog was able to push out some impressive performance from the PS3 with the Last of Us, dazzling many as one of the best looking games this last gen. In terms of just graphical fidelity though, it's far behind many other games. Of course, graphics are essentially just tools to display art direction, and a good aesthetic can make use of very little. If I were to look back at this generation on graphics, the benchmarks I think have been achieved largely by Europe, through the vast amounts of land and soldiers rendered at once by The Creative Assembly (Britain) in Total War: Rome II
CD Projekt's (Poland) own The Witcher 2: Assassins of Kings is no slouch either, pushing fidelity with densely packed environments, detailed characters, and "ubersampling" just for fun names to crazy effects.
Then you have a smaller dev by the name of 4A Games (Ukraine), outputting one of those most meticulous and atmospheric games I've yet played in Metro: Last Light…detailed down to the cracks that form in your gas mask. Every bit of the world is elaborately splayed in incredibly accurate lighting, battered high-rez textures, and high polygonal count.
Apart from individual games last gen, we're seeing some of the best fidelity titles across the world built on engines made in Europe, with Crytek's (Germany) Cryengine middleware (also the basis for Far Cry 2-3's engine), and DICE's (Sweden) Frosbite engine…powering Battlefield and pretty much every EA game now and for the foreseeable future. Heck, Havok, the middleware technology that powers countless (ok, Wikipedia says over 500) games, from physics to cloth simulation, is from a company founded and based in Dublin, Ireland.
I ask myself again looking at the games to come, "Where are we getting the games pushing that graphical edge?" Infamous: Second Son is fairly impressive, but my answer is showcased in 3 games:
Killzone Shadow Fall – Guerilla Games (Edit: Based in Netherlands and Britain)
The Witcher 3: Wild Hunt – CD Projekt again (Poland)
And the most impressive for last:
Tom Clancy's The Division – headed by Ubisoft Massive (formerly Massive Entertainment, Sweden) and supported by Ubisoft Reflections (Britain)
Again I'll stress good art direction at the end of the day matters more than dialing up polygon count…but I'm seeing one region pushing that fidelity the hardest. North America may also be the biggest gaming market base that buys these large titles, but for now I bow to the European engineering overlords that build them for me .