Just to clarify what Kojima said at PAX, since wasn't really that ambiguous although perhaps hard to believe. The Fox Engine is designed to be scalable and multiplatform. They built it to work well for next gen consoles. And likewise, if you go back to earlier reports about it, Kojima discussed being able to port and optimize titles on the Vita.
That said, Kojima did say that MGS GZ as it was demoed, represents what we will see on current gen consoles. He referred to an example of the mirror in the jeep having some jagged shapes do to lower polygon count. But he insisted that the PS3 and 360 skus of the game will look like what we saw.
Also wanted to respond to the brief discussion about MGS plots.
I think its misguided to look for, and for Kojima to try to explain the series' supernatural elements. With MGS1 I think many of the characters were deliberately designed to be supernatural. I think the series has actually gotten worse as Kojima has tried to explain these aspects with pseudo science fiction, and even more so, try to retroactively reclaim early Metal Gear works as part of some cohesive timeline.
Sniper Wolf supposedly could hold one position for days at a time---no real human could actually do this. Vulcan Raven could apparently convene with nature---his body (including bones) were eaten by ravens after you beat him. Decoy Octopus literally transfuses the blood of people he disguises himself as, which isn't medically possible.
But the point isn't really how plausible it is. What Kojima was really doing was translating video game logic into a style of story telling. A "boss character" isn't something that could pass the scrutiny of strict realism. Take any real life skilled warrior, shoot them once, and they cease to be "a boss."
So I mean if you look at the way Vulcan Raven's body is completely consumed, its a poetic device, to say his spirit has joined nature and what not. Its not "absurdist" and its not like the game is really telling you, "ravens like to eat bones!"
Roger Ebert has talked in his reviews how like romantic comedies depend on a single grain of information being withheld from the two leads, which creates this spiraling drama. And that in the real world, such a misunderstanding would be logistically impossible.
Most audiences don't question that kind of implausibility though. The reason is mainly that they want to watch Kate Hudson dance around in Ugg boots or whatever.
So I mean, I think the lesson as applies to Metal Gear though, is that just because it couldn't happen in the real world, doesn't defeat its purpose as a piece of fiction. It is deliberate. It is designed to entertain you, and use *yes* a contrived formula, as a vehicle for other ideas.