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The in-game engine was utilized in order to make that trailer. When it comes to the PS3, it is able to do things during non-playable cut-scenes that it simply cannot do during actual gameplay. So while it could be considered "in-game", it is a bit misleading. When we're eventually able to play that game, the actual level design cannot possibly look like that, unfortunately. It will look close, though, and will no doubt be an impressive feat.