In computer graphics, ray tracing is a rendering technique for generating an image by tracing the path of light as pixels in an image plane and simulating the effects of its encounters with virtual objects. The technique is capable of producing a very high degree of visual realism, usually higher than that of typical scanline rendering methods, but at a greater computational cost. This makes ray tracing best suited for applications where the image can be rendered slowly ahead of time, such as in still images and film and television visual effects, and more poorly suited for real-time applications like video games where speed is critical. Ray tracing is capable of simulating a wide variety of optical effects, such as reflection and refraction, scattering, and dispersion phenomena (such as chromatic aberration).
Today, games use tools like tesselation, shaders, occlusion, and mapping to achieve nearly photo-realistic results. And we may be getting closer to the holy grail of lifelike graphics, ray-tracing.
In this video Chris Schodt talks about graphics and the big news around ray tracing.