Machinima is the use of realtime 3d and game engines, combined with video editing equipment to produce dramatic ‘films’. These have a strong look, based on the 3d engines that they are originated on, and range from simply recording game footage, and dubbing over voices, to actually taking the 3d engine and making your own characters and environments.
It’s been around for a while, and is developing as a concept. There are filmmakers also developing work in second life, the online virtual world.
Molotov Alta is the first real celebrity filmmaker in the area, and HBO has paid a six figure sum for his second life film.
This is getting more and more interest from major media. Machinima adverts are being produced, and an episode of CSI is to have a second life killer.
to be fair, a lot of machinima are not very good, but it’s certainly an interesting development.
Other places to look for more info

[...] is something that really shows what Machinima is capable of, and how it can be used as a viable filmmaking medium. I’ve not been overly [...]