The future of animation

One open challenge in computer animation is a photorealistic animation of humans. Currently, most computer-animated movies show animal characters (A Bug's Life, Finding Nemo, Ratatouille, Ice Age, Over the Hedge), fantasy characters (Monsters Inc., Shrek, Teenage Mutant Ninja Turtles 4, Monsters vs. Aliens), anthropomorphic machines (Cars, WALL-E, Robots) or cartoon-like humans (The Incredibles, Despicable Me, Up). The movie Final Fantasy: The Spirits Within is often cited as the first computer-generated movie to attempt to show realistic-looking humans. However, due to the enormous complexity of the human body, human motion, and human biomechanics, realistic simulation of humans remains largely an open problem. Another problem is the distasteful psychological response to viewing nearly perfect animation of humans, known as "the uncanny valley." It is one of the "holy grails" of computer animation. Eventually, the goal is to create software where the animator can generate a movie sequence showing a photorealistic human character, undergoing physically-plausible motion, together with clothes, photorealistic hair, a complicated natural background, and possibly interacting with other simulated human characters. This could be done in a way that the viewer is no longer able to tell if a particular movie sequence is computer-generated, or created using real actors in front of movie cameras. Complete human realism is not likely to happen very soon, but when it does it may have major repercussions for the film industry.
For the moment it looks like three dimensional computer animation can be divided into two main directions; photorealistic and non-photorealistic rendering. Photorealistic computer animation can itself be divided into two subcategories; real photorealism (where performance capture is used in the creation of the virtual human characters) and stylized photorealism. Real photorealism is what Final Fantasy tried to achieve and will in the future most likely have the ability to give us live action fantasy features as The Dark Crystal without having to use advanced puppetry and animatronics, while Antz is an example on stylistic photorealism (in the future stylized photorealism will be able to replace traditional stop motion animation as in Corpse Bride). None of them mentioned are perfected as of yet, but the progress continues.
The non-photorealistic/cartoonish direction is more like an extension of traditional animation, an attempt to make the animation look like a three dimensional version of a cartoon, still using and perfecting the main principles of animation articulated by the Nine Old Men, such as squash and stretch.
While a single frame from a photorealistic computer-animated feature will look like a photo if done right, a single frame vector from a cartoonish computer-animated feature will look like a painting (not to be confused with cel shading, which produces an even simpler look). (wikipedia)