Machinima has advantages and disadvantages when compared to other styles of filmmaking. Its relative simplicity over traditional frame-based animation limits control and range of expression. Its real-time nature favors speed, cost saving, and flexibility over the higher quality of pre-rendered computer animation. Virtual acting is less expensive, dangerous, and physically restricted than live action, but also less expressive. Machinima can be filmed by relying on in-game artificial intelligence (AI) or by controlling characters and cameras through digital puppetry. Scenes can be precisely scripted, and can be manipulated during post-production using video editing techniques. Editing, custom software, and creative cinematography may address technical limitations. Game companies have provided software for and have encouraged machinima, but the widespread use of digital assets from copyrighted games has resulted in complex, unresolved legal issues.

Machinima productions can remain close to their gaming roots and feature stunts or other portrayals of gameplay. Popular genres include dance videos, comedy, and drama. Alternatively, some filmmakers attempt to stretch the boundaries of the rendering engines or to mask the original 3-D context. The Academy of Machinima Arts & Sciences (AMAS), a non-profit organization dedicated to promoting machinima, recognizes exemplary productions through Mackie awards given at its annual Machinima Film Festival. Some general film festivals accept machinima, and game companies, such as Epic Games and Blizzard Entertainment, have sponsored contests involving it.

Precedent

1980s software crackers often credited themselves for thwarting a program's security by attaching a custom introductory sequence (intro) to the affected program. Increasing computing power allowed for more complex intros, and the demoscene formed when focus shifted to the intros instead of the cracks. The goal became to create the best 3-D demos in real-time with the least amount of software code. ; harvnb: 2007 Disk storage was too slow for this; graphics had to be calculated on the fly and without a pre-existing game engine.

In Disney Interactive Studios' 1992 computer game Stunt Island, users could stage, record, and play back stunts; as Nitsche stated, the game's goal was "not ... a high score but a spectacle."harvnb: 2007 Released the following year, id Software's Doom included the ability to record gameplay as sequences of events that the game engine could later replay in real-time. Because events and not video frames were saved, the resulting game demo files were small and easily shared among players. A culture of recording gameplay developed, as Henry Lowood of Stanford University called it, "a context for spectatorship.... The result was nothing less than a metamorphosis of the player into a performer." Another important feature of Doom was that it allowed players to create their own modifications, maps, and software for the game, thus expanding the concept of game authorship.