I do believe that the days of flat panel 3d imaging are numbered. But how long till this type of graphics can be implemented I do not know. My question would be "Are they making a new engine? Or just changing the way objects are rendered in game?"
To me they seem to hint towards a new engine because of the way they are being tight lipped about things (Which I think is the smart money move wise). But if so I think they are far from doing any kind of physics based action with there renders. All the objects they created were of just still objects and fixed shadows. Would like to see some animation from them.