Which games are pushing the limits of sound psychology right now?
When will audio catch up with the 3d trend and what will that be?
Battlefield Bad Company 2 is pretty awesome. The realism aspect of this game borders on irresponsible. It will definitely have you jumping in your seat. I think it also won a Gamespot Best of 2010 for sound as well.
And I have to mention Charles Deenen's work on the Need for Speed Franchise. That man does an amazing job of simulating appropriate doppler effects and POV auto sounds while still incorporating some surreal elements. I am quite sure when I listen for the audio and am not playing first hand, that I have detected a touch of animal roar or jet engine. He released a book as well on how to record cars called "Need for Speed" Car Recording Guidebook. He is a true master of the hyper-real and a really impressive teacher/speaker. I have had the honor of cooresponding with him about gaming and he really did clear up a lot of what was very fuzzy to me in the world of game sound design very quickly.
Finally, I too have to agree with Lenny above, Assasin's Creed impressed me as well. Great atmospheres and audio interaction. It had fabulous animation as well. That was a piece of art. This had very detailed realism with very subjective abstract elements weaved in quite seamlessly. Very cinematic!
I personally have a fondness for horror based sound design in games. Max Payne, Silent Hill, and even Resident Evil were are very cool albeit not the newest titles. While game play simply is not as smooth and complex subjectively as cinema yet, the live user dependent panning features of SFX in gaming are quite effective in the genre of horror and really push the envelope for the psychological effectiveness of horror sound design in general.
As far as when audio will catch up with the 3D, I believe in gaming this has everything to do with processing power and bandwidth. But it is improving by leaps and bounds all the time. Putting nice 3D graphics and audio in a game is still a very computer taxing process. I have even heard game designers say that creating a console game is essentially like creating a interactive story running real-time video renders and triggering thousands of audio parameters and cues on an imac G3. You have to consider that Pixar and Dreamworks don't have to render their animation in realtime or trigger their sound elements and processors individually and on the fly. We have the techology to make amazing 3D and incredible surround audio now. The problem appears to be how we can put them both together and have them smoothly integrate in real-time while managing processing constraints?
Flower on PS3.
Also, according to what I've heard from other people (havent played it myself yet) - Limbo on Xbox 360.
And then some fantastic sounding AAA games (selecting ones that generally excel in all fields - music, sound design, dialogue): Red Dead Redemption, Batman Arkham Asylum, Uncharted 2, Dead Space, Assassin's Creed 2.
As for the 3D trend, audio has been 3D for quite some time already :) But i'd be interested to experience this new Iosono format - http://www.iosono-sound.com/
Sound has definitly come a long way in cyberspace in recent years due to a decrease in audio technical restraints. The gamer can now be contrasted as a film viewer in many ways and film sound theory is now a part of gaming as we hear hollywood quality sound effects alongside cinematic orchestras in certain games. Your question is fairly open Chris as many would see sound psycology as creating a realistic acoustic cyberspace. A few games amongst others I played recently that I thought did this well were the Assassins Creed series (walking through the market places, really good crowd sound and interaction) and Dead Space which was sonically spot on, not forgetting the GTA series too which is a great accoustic space with the music actually being diagetic. It would help if character AI in sound was taken more seriously, in fallout new vegas (yes Bethesda released another unfinished game for us to test for them) I shot enemies that would then say "did anybody just hear a sound" not "s**t I've just been shot". Games that are pushing sound psycology are not always the cinematic ones though, you have titles like Electroplankton for the DS. Here we have a solid example of a contemporary video game being a compositional instrument, it can be considered both a game and a sound toy. It has real musical potential unlike guitar hero or rock band etc and you can even record your own sounds into the program to make some great experimental masterpieces. In regards to your question when will audio catch up with 3d, in my opinion it surely is way ahead already as surround sound has been part of a number of games for a few years now. Many would argue that its maybe the graphics that need to catch up with the sound now even though the sound departments still struggle to get a fair budget in development.