"I dare say that in two to three years time we will see something [using ray tracing from game developers]," stated Intel engineering manager Michael Vollmer.

What is Ray-Tracing?

"Ray tracing calculates how light interacts with objects, including proper reflections and shadows. The results are often described as photo-realistic (see example above), with the process used create computer-generated effects in films and television shows."-shacknews

Here is the old Quake demo of ray-tracing being tested and demonstrated on a console.

Good example of Ray-tracing(not on console)