[NathanKP]

For a standard modern game rough approximations of the quality shown in that video are more than adequate for something simple like a loincloth. It might not do for approximating an entire lake or body of water, but for simple things it would work just fine.

Even gaming consoles are limited by the number of polygons they can render, so the physics engine, if running in a game, wouldn't have to consider all the approximation points that were used to generate the high res renders at the start of the video for instance.