Very high polygon counts is also nessesary.

Accuracy.

Baked Lighting, Materials, and textures.

ACCURACY

Realism is all about accuracy. That means the models have to be accurate as well as the textures. The lighting has to be accurate also. Luxrender is a rendering engine that uses physics based lighting, so naturally it creates realistic renders. Most 3d software cannot simulate realistic lighting this way. They Cycles render engine (blender) uses a similar approach though. So everything has to be accurate, even the animations (they perhaps use bvh animations). Now, actually those AAA games are not very realistic at all. Yes, they look good, but they lack very much in accuracy. The best I have seen so far is the latest Metal Gear Solid (the one yet to be released):

BAKED

Another thing they use in AAA games to sell the "realism" is baked texture maps. They also use texture atlases to deal with larger scale models. A baked texture map is taking texture information or material information and gluing it to the model. If you want your model to have good ambient occlusion, you bake out an ambient occlusion texture and it will stay on the model. Ambient occlusion takes a while to render if you want it to look good, so if you bake it into your character, you don't have to re-render the ambient occlusion. You can bake in reflections also (remember, accuracy).

So, say you can get a decent still rendered image, but you want the way it looks in the render to be applied to your model. Well in blender you can bake a render to a texture so that all of the lighting information and reflection information in your still render, will be glued to your models. Then you can rotate around the model right in the 3d viewport, and it will look like the render. That is what I did for the top image here:

http://forum.maratis3d.com/viewtopic.php?id=888

Again, most of the AAA games are not that realistic mainly because of processing limitations. Have you heard about the Euclidean engine?

Hi,

The answers in this thread are for the most part exactly right. No, you do not need to have very high count of polygons to have photorealistic characters, though higher quality generally increases the number of polygons. The artist needs to watch all the numbers in the files of the model folder to make sure that there is not too much data in the model folder in order to keep performance demands reasonable. How much is allowed varies widely among game engines and how much art asset is actually rendered in game, as well as a few other factors.

Very nice characters can be made with a few thousand polygons, actual photographic image applied to the normal surface map, some baked lighting and texture, and of course art skill. You may add much more such as shaders, bump maps, and so forth, which add some realism, but only experience can make you discern the right balance for the situation.

I'm a 2d artist, not 3d, but making a character look realistic takes a lot of anatomy. You need to know how large the character's bones are, where their muscles connect, how bulky the muscles are (in different positions), which veins are visible on the surface, etc. Then you need to know the textures of the skin (which in addition to texturing and diffuse and specular reflectivity requires subsurface scattering to look right in most lighting), the eye (the way that the eye's lens refracts light hitting the iris is important), hair (I assume that making polygons look like strands and locks is extremely hard, since it's hardly ever done well, even with the rigid, short styles modellers use to keep from dealing with hair physics), nails, and other tissues. That's without putting the body in motion, or even making it look right in an environment.

For extreme realism, this is true, but we are talking about world-class artists for AAA popular games in that case.

Here is a model in Blender from the MakeHuman software:

There is no ambient occlusion on it.