The Source Filmmaker (SFM) is the movie-making tool built and used
by us here at Valve to make movies inside the Source game engine.
Because the SFM uses the same assets as the game, anything that
exists in the game can be used in the movie, and vice versa. By
utilizing the hardware rendering power of a modern gaming PC, the
SFM allows storytellers to work in a what-you-see-is-what-you-get
environment so they can iterate in the context of what it will
feel like for the final audience.
In other words: it’s a tool built upon Valve’s game engine to make seriously good-looking animated movies.