Uncanny Valley

The Uncanny Valley is a hypothesis that holds when a human replica looks and acts almost, but not perfectly like actual humans, it causes a negative response to human observers.

Hypothesis
From Wikipedia


 * Mori's original hypothesis states that as the appearance of a robot is made more human, a human observer's emotional response to the robot will become increasingly positive and empathic, until a point is reached beyond which the response quickly becomes that of strong revulsion. However, as the robot's appearance continues to become less distinguishable from that of a human being, the emotional response becomes positive once more and approaches human-to-human empathy levels.


 * This area of repulsive response aroused by a robot with appearance and motion between a "barely human" and "fully human" entity is called the uncanny valley. The name captures the idea that an almost human-looking robot will seem overly "strange" to a human being, will produce a feeling of uncanniness, and will thus fail to evoke the empathic response required for productive human-robot interaction.

Use in Games
Since technology used to build games has improved well enough for games to fall into the Uncanny Valley, game designers need to be careful to avoid it unless they want to utilize it for a specific reason. Often there are two ideal places to be at: the stylized game on the left side of the valley or the photorealistic game on the right side.

Due to the Hypothesis, photorealism is a difficult challenge to achieve without a large budget. Even then, a few minor differences here and there can easily break the realism, causing a fall down to the valley.

Stylized has larger benefits in that the developer has much more freedom and they could put their budget to creating unique aesthetics. The challenge on this end is to properly instill enough human-like quality to achieve the positive reaction to the player.