The following paragraphs are expanding on the "Euphoria Engine's Possibilities for GTA IV" news.
To begin, we would like to point out that NaturalMotion's euphoria engine is not a graphics engine. Several sources have claimed euphoria to be a graphics engine, which would power Grand Theft Auto IV. This is an incorrect statement. A graphics engine, commonly known as a game engine, is reponsible for creating real-time graphics for a game. NaturalMotion's euphoria engine is not so much concerned with rendering real-time graphics, as opposed creating interactive animations for the game. The core technology is the Dynamic Motion Synthesis (DMS) system.
Provided enough processing power, such as in a next-generation console (PS3, XBox360), DMS is able to produce dynamic animations for in-game objects. One aspect of this, the DMS behaviors, simulates the responses of a human body to changes in its surroundings. This means that the animations you see taking place have not been pre-scripted or motion captured, as was the case in previous GTA games, but are generated on the fly. So for instance the same interaction with a pedestrian, repeated a dozen times, will produce a different outcome every time. And the shattering of a glass window will result in the glass breaking differently depending on how and where it is broken.
Another feature of the engine is its ability to give NPC characters their own unique artificial intelligence. Characters' behaviour takes place according to their environment and goals. As IGN's preview of Indiana Jones 2007 elaborated, "Every time Indy grabbed someone and tossed him through a window or door, he'd react in another way. And that's because there isn't a single canned animation in the entire game. Behavioral intelligence dictates every gesture, punch, kick and grapple. Say you punch an enemy and he falls. Not only will he fall differently every time, but he'll stand up differently also. Enemies will use tables, cars or anything else available to help them get their bearings." We haven't seen euphoria in action, so we must take their word for it.
Combined, this technology is aimed to provide gamers with "unique game moments". Because animations are created on the fly, one player's experience will differ from another's. This brings Grand Theft Auto's interactive game type into a new world, as no longer are players free to explore the world at their will, they are free to interact with the world just as they please, without being subjected to pre-determined animations.
Rockstar Games' and Natural Motion's partnership was announced at the end of February, 2007. By this point, "several months of close collaboration" had been taking place between the two companies. We can only assume, that this means work on integrating euphoria into Grand Theft Auto IV began sometime at the end of 2006. NaturalMotion's website explains that the integration of the euphoria engine is a result of cooperation between the development team and NaturalMotion, indicating that the opportunities euphoria is creating for GTA IV will be fully utilized:
"NaturalMotion has close co-development relationships with publishers and development teams to integrate euphoria into their next-generation titles. This allows clients to hit the ground running and produce euphoria-enabled games within short time frames."
Source: NaturalMotion euphoria product description
At the time of writing, no games have been released with this technology. It is aimed directly for the next generation consoles; the PlayStation 3 and Xbox 360. The only games to be officially confirmed as using it are Indiana Jones 2007 and Star Wars: Force Unleashed (November, 2007).