Optimization has a very important role in the video game industry. Nobody wants a game that can not run, so developers have to make sure that everything runs smoothly before actually releasing a game. Not everyone has a mega computer in their house that can simulate an incredibly detailed video game world without having a huge effect on the performance. Most people have a simple console at home, which is restraining, but also very helpful because the developers know exactly what they are working with.
Pre-rendering is a method of rendering mainly used for movies, animations, architecture, where the goal is to obtain a result as realistic as possible. It is usually done on supercomputers and each frame can take up to several minutes, or even hours, depending on the case, to render. The images that result after the process is done can be breathtaking, but very expensive and time-consuming. Usually, movies that use this type of rendering have huge budgets, and lots of employers that work individually on the 3d models, lighting, visual effects, simulations of particles, etc. The actual process of rendering is very demanding on the hardware, that is why a supercomputer is needed, whit an incredible processing power. A good example of a pre-rendered movie is Frozen 2 made by Disney, which had a budget of 150 million dollars.
Real-time rendering is a method used primarily for video games, where the game runs on the player's pc or console, where each frame has to be rendered in a matter of milliseconds. The machine is basically displaying the image just after it has been rendered. Obviously, the quality of the render could never compete with the pre-rendered ones done by supercomputers, but that does not mean that developers can't use some tricks to make the game look closely good to a pre-rendered movie. Engines like Unreal or Unity simulate reality in a cost-effective way. With the restrictions that the users' PCs or consoles bring, the developers have to optimize the game so well, to avoid poor performance.
A good example of a real-time rendered game that still manages to look stunning because of the developers' tweaks is The Last of Us Part 2.
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