The clip showing the water interacting with breaking glass blew my mind. It may well be a while before we see anything close to that level of realism being incorporated into games though.
True, but technologies like this usually make their way into pre-rendering first, i.e. pre-rendered cutscenes in games, CGI scenes in movies, or fullly animated movies. Although the latter category hasn't seen much in the way of realism, mostly due to uncanny valleyness.
This isn't prerendered - it's real time. Prerendered water (as seen in movies) looks far more realistic than this. Check out the Naiad link someone posted above.
This is great for real time though. It's using a form of SPH which is far easier to adapt for GPUs, and can crunch through those particle-particle interactions.
High end offline water sims would use a different algorithm (usually FLIP), maybe run for several days to sim a few seconds and occupy 10's of Gb of memory.
If anyone's interested, download a copy of Houdini Apprentice for free and have a play.
I disagree. Games like Uncharted 3 have had much more sophisticated water simulations where water is an active part of the environment. Another example would be Hydrophobia. Crysis 3 is pretty much just slapping a heightmap onto a water surface, but it's no surprise that they take the easy route there since water is not an integral part of the experience in anyway. Crysis 3 is about shootin' men and robots that look like men, not about interacting with physically simulated water.
Here are slides from a presentation about Uncharted 3's water:
I believe they've talked elsewhere about the complexity of the water sims they did for areas that involved boats and an ocean you could swim through, but I don't have a link handy.
There's a differenece between physical simulation and visualization. The Crysis water looks awesome, even though its behavior is radically simplified. As those slides you linked show, the water in Uncharted is simulated much more thoroughly, but the visualization is pretty hacky.