The claim is that in the next decade video game engines will be used in the film-making process to eliminate post production altogether. Lucasfilm is making this statement in light of rapidly progressing video game technology. Both CG effects companies and game developers essentially use the same sort of techniques to produce what they do, especially when it comes to motion capture. So why not combine already existing methodologies and see what happens? The thought is similar to how the movie Rango was produced but much more advanced. If you've seen the BTS videos from that film then some of this tech will be old news to you, but how it is being used on the fly isn't...and that's the really cool stuff.
Virtual or partially virtual sets are the norm these days but it wasn't until a few years ago that a director could take a device and physically walk around the created world. Now this has been combined with game engines to allow the director interact with and control the virtual elements of that world. Actors could be able to see themselves as the virtual character they are portraying in an instant. Digital costume changes would be nothing but the click of a button. All of this is truly incredible when you consider that traditional rendering times for one frame of a feature film start in hours, not seconds. Rendering times on systems like what Lucasfilm is developing clock in at 24 frames per second. I'm no math-wiz, but that seems just a tiny bit faster.
The word is that Lucasfilm would like to take this to the point that people could actually interact with the movies they watch at home. I'm not totally on board with that one, but that doesn't take away from the brilliance of this tech demo.
Who knows what's next.