I get what they're trying to do but using satellite images for the land scape "looks" fake anyway. The problem is not that it's a photo, the problem is that its a static image, i.e. the lighting and colour doesn't change when the camera changes position.
A somewhat better approach might be to use photos of objects and use those images as textures, but you'd need to run some pretty intensive pixel shaders to make even these look realistic as you'll always have the lighting of the object to content with when the image was taken.
To recreate photo realistic images is the holy grail of the games industry, and from what I've learned the only real solution is ray tracing but we're a long way off from that being a real time possibility.
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