Hold your horses! That video is quite old, or only slightly improved from the one I saw over a year ago. There is a lot of hyperbole around this engine, mainly due to the way the narrators pitch it.
I'm hugely sceptical about it.
Check out hacker news on this, the comments are very enlightening:
http://news.ycombinator.com/item?id=2835383
offeemug 7 hours ago | link
I think what they're doing is great, but I see two problems with their presentation. First, computer rendering techniques are extremely well understood and well researched. We've picked the low hanging fruit, much of the high hanging fruit, and everything in between. There is no "groundbreaking new technology" to be invented. They're converting polygons into voxels (although each voxel is probably a sphere for cheaper computation), and using software ray-tracing to render in real time. Since ray-tracing is trivially parallelizable, the multicore technology is just about there now. A 12-core machine will give just about 20FPS. The reason why they can get away with an incredible amount of detail is that ray-tracing diffuse objects is fairly independent of the number of visible polygons in the scene.
The second problem is that 10^4x improvement in level of detail does not mean 10^4x aesthetically pleasing (or in fact, more aesthetically pleasing at all). Ray tracing gets very expensive the moment you start adding multiple lights, specular materials, partially translucent materials, etc. It is very, very difficult to do that in real-time even with standard geometry, let alone with 10^4x more polygons. This is why their level doesn't look nearly as good as modern games despite higher polygon count (compare it to the unreal demo: youtube.com/watch They only use diffuse lighting and few lights. In terms of aesthetic appeal of a rendered image, lighting and textures are everything.
Furthermore, one of the biggest impacts on how aesthetically pleasing a rendered images looks is made by global illumination. That's also something that's extremely difficult to do in real time with raytracing, but is possible with gpu hardware with tricks. The trouble is, these tricks look much better than raw polygons.
Again, I love what they're doing. Real-time ray-tracing is without a doubt the future of graphics, but it would be nice if they were a little less sensational about the technology, and more open about the limitations and open issues.