The AMAS defines machinima as "animated filmmaking within a real-time virtual 3-D environment". In other 3-D animation methods, creators can control every frame and nuance of their characters but, in turn, must consider issues such as key frames and in-betweening. Machinima creators leave many rendering details to their host environments, but may thus inherit those environments' limitations. Because game animations focus on dramatic rather than casual actions, the range of character emotions is often limited. However, Kelland, Morris, and Lloyd state that a small range of emotions is often sufficient, as in successful Japanese anime television series.
Another difference is that machinima is created in real time, but other animation is pre-rendered. Real-time engines need to trade quality for speed and use simpler algorithms and models. In the 2001 animated film "", every strand of hair on a character's head was independent; real-time needs would likely force them to be treated as a single unit. Kelland, Morris, and Lloyd argue that improvement in consumer-grade graphics technology will allow more realism; For cut scenes in video games, issues other than visual fidelity arise. Pre-rendered scenes can require more digital storage space, weaken suspension of disbelief through contrast with real-time animation of normal gameplay, and limit interaction.
Like live action, machinima is recorded in real-time, and real people can act and control the camera. Filmmakers are often encouraged to follow traditional cinematic conventions, such as avoiding wide fields of view, the overuse of slow motion, and errors in visual continuity. Unlike live action, machinima involves less expensive, digital special effects and sets, possibly with a science-fiction or historical theme. Explosions and stunts can be tried and repeated without monetary cost and risk of injury, and the host environment may allow unrealistic physical constraints. University of Cambridge experiments in 2002 and 2003 attempted to use machinima to re-create a scene from the 1942 live-action film "Casablanca". Machinima filming differed from traditional cinematography in that character expression was limited, but camera movements were more flexible and improvised. Nitsche compared this experiment to an unpredictable Dogme 95 production.
Berkeley sees machinima as "a strangely hybrid form, looking forwards and backwards, cutting edge and conservative at the same time". Machinima is a digital medium based on 3-D computer games, but most works have a linear narrative structure. Some, such as "Red vs. Blue" and "The Strangerhood", follow narrative conventions of television situational comedy. Nitsche agrees that pre-recorded ("reel") machinima tends to be linear and offers limited interactive storytelling; he sees more opportunities in machinima performed live and with audience interaction. In creating their improvisational comedy series "On the Campaign Trail with Larry & Lenny Lumberjack" and talk show "Tra5hTa1k with ILL Will", the ILL Clan blended real and virtual performance by creating the works on-stage and interacting with a live audience. In another combination of real and virtual worlds, Chris Burke's talk show "This Spartan Life" takes place in "Halo 2"s open multiplayer environment. There, others playing in earnest may attack the host or his interviewee. Although other virtual theatrical performances have taken place in chat rooms and multi-user dungeons, machinima adds "cinematic camera work". Previously, such virtual cinematic performances with live audience interaction were confined to research labs which had powerful computers.
Machinima can be less expensive than other forms of filmmaking. Strange Company produced its feature-length machinima film "BloodSpell" for less than £10,000. Before using machinima, Burnie Burns and Matt Hullum of Rooster Teeth Productions spent US$9,000 to produce a live-action independent film; in contrast, the four Xbox game consoles used to make "Red vs. Blue" in 2005 cost $600. The low cost caused a product manager for Electronic Arts to compare machinima to the low-budget independent film "The Blair Witch Project", without the need for cameras and actors. Because these are seen as low barriers to entry, machinima has been called a "democratization of filmmaking". Berkeley weighs increased participation and a blurred line between producer and consumer against concerns that game copyrights limit commercialization and growth of machinima.
Comparatively, machinimists using pre-made virtual platforms like Second Life have indicated that their productions can be made quite successfully with no cost at all. Creators like Dutch director Chantal Harvey, producer of the 48 Hour Film Project Machinima sector, have created upwards of 200 films using the platform. Harvey's advocacy of the genre has resulted in the involvement of film director Peter Greenaway who was a juror for the Machinima category and gave a keynote speech during the event.
Kelland, Morris, and Lloyd list four main methods of creating machinima. From simple to advanced, these are: relying on the game's AI to control most actions, digital puppetry, recamming, and precise scripting of actions. Although simple to produce, AI-dependent results are unpredictable, thus complicating the realization of a preconceived film script. For example, when Rooster Teeth produced "The Strangerhood" using "The Sims 2", a game that encourages the use of its AI, the group had to create multiple instances of each character to accommodate different moods. Individual instances were selected at different times to produce appropriate actions.
In digital puppetry, machinima creators become virtual actors; each crew member controls a character in real-time, as in a multiplayer game. The director can use built-in camera controls, if available. Otherwise, video is captured from the perspectives of one or more puppeteers who serve as camera operators. Puppetry allows for improvisation and offers controls familiar to gamers, but requires more personnel than the other methods and is less precise than scripted recordings. However, some games, such as the "Halo" series, (except for Halo PC and Custom Edition, which allow AI and custom objects and characters), allow filming only through puppetry. According to Marino, other disadvantages are the possibility of disruption when filming in an open multi-user environment and the temptation for puppeteers to play the game in earnest, littering the set with blood and dead bodies. However, Chris Burke intentionally hosts "This Spartan Life" in these unpredictable conditions, which are fundamental to the show. Other works filmed using puppetry are the ILL Clan's improvisational comedy series "On the Campaign Trail with Larry & Lenny Lumberjack" and Rooster Teeth Productions' "Red vs. Blue". In recamming, which builds on puppetry, actions are first recorded to a game engine's demo file format, not directly as video frames. Without re-enacting scenes, artists can then manipulate the demo files to add cameras, tweak timing and lighting, and change the surroundings. This technique is limited to the few engines and software tools that support it.