The technique is known as SVOGI – Sparse Voxel Octree Global Illumination, and was developed by Andrew Scheidecker at Epic. UE4 maintains a real-time octree data structure encoding a multi-resolution record of all of the visible direct light emitters in the scene, which are represented as directionally-colored voxels. That octree is maintained by voxelizing any parts of the scene that change, and using a traditional set of Direct Lighting techniques, such as shadow buffers, to capture first-bounce lighting.
Performing a cone-trace through this octree data structure (given a starting point, direction, and angle) yields an approximation of the light incident along that path.
The trick is to make cone-tracing fast enough, via GPU acceleration, that we can do it once or more per-pixel in real-time. Performing six wide cone-traces per pixel (one for each cardinal direction) yields an approximation of second-bounce indirect lighting. Performing a narrower cone-trace in the direction of specular reflection enables metallic reflections, in which the entire scene is reflected off each glossy surface.
[Editor's Note: If the above sequence seems alien to you, it's because it is. Global Illumination requires a totally new lighting pipeline. In a traditional game, all indirect lighting (light that is bounced from a surface) is calculated in advance and stored in textures called lightmaps. Lightmaps give game levels a GI-look but since they are pre-computed, they only work on static objects.
In Unreal Engine 4, there are no pre-computed lightmaps. Instead, all lighting, direct and indirect, is computed in real-time for each frame. Instead of being stored in a 2D texture, they are stored in voxels. A voxel is a pixel in three dimensions. It has volume, hence the term "voxel."
The voxels are organized in a tree structure to make them efficient to locate. When a pixel is rendered, it effectively asks the voxel tree "which voxels are visible to me?" Based on this information it determines the amount of indirect light (Global Illumination) it receives.
The simple takeaway is this: UE4 completely eliminates pre-computed lighting. In its place, it uses voxels stored in a tree structure. This tree is updated per frame and all pixels use it to gather lighting information.]
