We don't - Fortnite and Minecraft are good examples of hit games that don't look photo real deliberately. The Matrix demo is set in a city because (a) that's w

We don't - Fortnite and Minecraft are good examples of hit games that don't look photo real deliberately. The Matrix demo is set in a city because (a) that's where the Matrix is set, and (b) it's relatively "easy" to do photo-realism in a city because you can use actual photos, and because other than the people the objects are reflective shiny boxes or surfaces.