DigiQ8
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Complementing euphoria will be Pixelux Entertainment's Digital Molecular Matter (DMM) technology, which brings a level of realism to next-gen games never seen before by making completely interactive environments that react as they would in real life. From crumbling walls to shattering glass and even swaying organic plant life, in-game objects have material properties that behave realistically all in real time.
http://www.videosift.com/video/Euphoria-physics-engine-GC-2006-demo