You should probably re-title your thread, as it's a bit misleading; I thought you meant that the Kombat itself be realistic, not the characters (with that in mind, don't use all-caps).
I'm for the characters looking as real as possible, but if it's at the cost of the attractive and interactive backgrounds or other things, then I don't mind them looking as they have in the most recent games.
Maybe it can be done to have them look real and keep the entertaining levels if the team is allowed more time to do it right.

UFC games are quite realistic.