AnandTech wrote an article about the state of hardware accelerated physics cards like the AGEIA PhysX:
To be fair, much of this is aligned with the traditional gaming seasons; titles are often loaded in to the 4th quarter for the Christmas season, leaving few games - and by extension few new uses of physics - to talk about. But it's also indicative of a general dampening of spirit for hardware accelerated physics, things have not gone as planned for anyone. Now in 2007, some 2 years after Ageia's announcement got the ball rolling, the number of released AAA titles using some sort of hardware physics acceleration can still be counted on one hand.
So what happened to the enthusiasm? It's not a simple answer as there's no single reason, but rather a combination of reasons that have done a very good job dampening things. Today we'll take a look at these reasons, the business behind all of this, and why as the days tick by hardware accelerated physics keeps looking like a pipe dream.