This guy has put together a plugin for creating motion capture animations in Unreal Engine 4 using the HTC Vive. He is using Inverse Kinematics to determine where the body should be based on the two controllers, the headset, a vive tracker around the waist and two more vive trackers attached to the feet. I bring this up to show off what I would consider the ultimate power of IK, which is animating the character 100% programmatically, without any pre-made art assets.
This is an extreme example of what IK can do, but when you bring physical simulation and procedural animations into the picture it gets even more interesting. Now you can envision having procedural animations with physics added for realism, and IK used to make the minor adjustments necessary to keep the animation from getting too out of hand.
This next video is another example of taking programmatic and simulated animations to the extreme. This game still uses Forward Kinematics for its basic movements, but these are heavily modified by the physics simulations that are constantly being run on every character. In this game's engine, every character has something akin to simulated muscles. Animations are played not only on the skeleton (like it would be in a normal game), but they are also a part of this muscular system. So every swing or step in this game involves calculating a physical force interacting with the world. Each part of the body, armor, and weapons have their mass to take into account. All objects have velocity as well, which is how damage is calculated on a successful hit. The result is highly dynamic combat where anything is possible, especially things not foreseen by the developers.
If you go to 1:30 of the above fight, you can see an example of what I mean by dynamic combat. The player uses part of their weapon to hook the enemy's arm, and then he pulls them forward and onto the ground. This is the true potential of an animation system that is not defined by assets made by artists who could never possibly imagine every situation in a game, nor should they have to. These kinds of systems allow for skill based games with no true limit on how much better you can become at the game. The downside of this is that so much freedom allows the player to hurt themselves, and there's just as many ways to screw yourself as there are to be awesome.