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“Machinima – a portmanteau of machine and cinema – is a term used to describe the process of using real-time computer graphics engines to create a cinematic production. It’s a practice that has existed for as long as in-game recording has been possible, the first generally attributed work being United Ranger Films’ Diary of a Camper – a minute-and-a-half long fan-film made within first-person shooter Quake (1996) – though some claim examples that pre-date it. Miltos Manetas’ Miracle, for instance – shot using flight-simulator F/A-18 Hornet (1993) – was made in the same year. Both of these films use their source material in different ways, to different ends; and while one of them was exhibited on the wall of a major gallery, the other was released online for free as a downloadable demo-file.”
Full feature on the history of machinima online at Sight & Sound.