E3 2012: Square Enix's Luminous Engine
Square Enix demoed their amazing Luminous Engine at E3 2012. Check it out in all its glorious goodness above. The publisher also claimed that the video was real-time and not pre-rendered.
Word on the street is that Square Enix made this with next-gen consoles in mind, so you can expect this tech to stick around for a while. According to Kotaku, development of games on this engine will start in late 2012 or at the beginning of 2013.