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Yes, probably pre-rendered but they clarified that these were in-game cinematics. The quality is similar to other games I've played on PS4 Pro.
I figure PS4 Pro/Xb1 will look the same as their demonstration but less powerful consoles may be lower quality.
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Pretty sure they meant that they used the game engine to render the cinematics as opposed to some external application. Rendering these kinds of graphics in real time would be impressive, but it'd also be inefficient to do it that way.