"I've recently been working on a new feature for the Offset Engine: real time ambient occlusion. I took some ideas from Crysis and some other developers (most notably Inigo Quilez…thanks Inigo!) who have been working on similar techniques and made a few improvements over those approaches that makes the effect much more convincing, IMO. For those not familiar with the term, ambient occlusion is a way of approximating global illumination by computing how much a point is occluded by other geometry in the scene (good overview at http://www-viz.tamu.edu/students/bmoyer/617/ambocc/)
It's not quite ready for prime time yet, and currently requires quite a bit of tweaking to get it looking good in different situations, but I thought I'd show you some WIP comparison screenshots (attached). It works as a post process and requires no precomputation, and works with moving and deforming objects. It currently requires deferred rendering to be turned on, though I may be able to get around this dependency As you can see from the comparison shots, it improves the quality of the rendered scene significantly! The first shot showing the boxes is lit in a very boring way intentionally (a single sky light placed in the editor) to highlight the benefit of the technique."