This is actually quite an exciting product.
Physics has been starting to become a limiting issue - look at some recent games: sure the water looks nice and bump-mapped, with some sprites to represent a splash - but think how much better it could look if the water was truely fluid. How about trees that waved in the wind, or had branches that could break off? What about a car that actually took damage realistically - instead of just having a door fall off when a critical level is reached?
It's actually interesting that developers are now starting to turn to custome silicon to perform such tasks - I'd always considered them the domain of the general purpose CPU, although there has been a lot of work recently on accelerating some physics operations using GPUs (e.g. collision detection). However, while some applications can, with some trickery, be offloaded onto the GPU, not all can.
The important thing about specific-purpose processors is that they can be made much more powerful and much more cheaply than general purpose CPUs. There are GPUs on the market now which are essentially 16 core processors. Their cost is a fraction of that of a general-purpose CPU, their power consumption greatly smaller, yet their number-crunching strength is enormous by comparison. There has been some research in using the enormous power of modern GPUs to help in computer analysis of medical X-rays: A single GPU can considerably out-perfoum multi CPU xeon workstations.
Just to give another example - you can now buy encryption processing units for high-end servers. Busy secure web-sites need huge amounts of CPU power for the encryption - what do you do if you've already got 8 Xeons? Specific purpose encryption cards can encrypt data as fast as a SCSI RAID system can supply it - at a price comparable to a single CPU.
The development of such products is unlikely to be significantly affected by the emergence of multi-core CPUs. Multi-core CPUs are one way of increasing computational power, cheaper and more effective than using seperate processors. However, if your task is repetitive and parallelisable, which 3D rendering, geometry and physics all are - then a single-purpose solution will give performance far in excess of that of a general purpose solution, and often at significantly reduced cost.
Of course, there's no reason why such specific purpose processing units couldn't be integrated into a general purpose unit. However, I suspect that this will be less good than an add-on processor board - too many different product levels (CPU speed, co-processor cores, co-processor speeds, etc), different types of circuit design may have different optimal balances for manufacturing, general purpose computing platform has historically had low-speed interconnects due to upgradability - a single purpose board can have much higher CPU-RAM interconnect bandwidth.