Normally it's called FAKE GAME FOOTAGE or TARGET RENDER if you will. You showcase what the game WILL look like, play like and feel like. It can be 100% CG sometimes, it can use tech that will be used for the game (lighting system, mesh, shaders, etc) and other times it can be half and half but it's always scripted and normally you make sure that you don't shoot too high.
In the past years, some companies have shown Fake Game Footage publicly (normally it's kept in-house for various reasons and one of them is to not alienate the audience with some promises that can't be delivered). The first gameplay demo for Bioshock Infinite really felt like a Fake Game Footage reel and when I saw that ALIENS demo, it looked scripted up the butt and smelled like pure Target Render.
I know that some Target Renders have found their way unto the web; Assassin's Creed for example showcases the main navigation gameplay and some fight sequence. Plus visually, it must've looked awesome back then and the fact that the final game looked better shows that FGF/Target Render can be a great way to easily show your idea to the world.
But based on what I read about ALIENS, they put their goals way too high. Maybe to hide the fact they were scared SEGA would pull a move and was getting impatient while waiting for actual proof that they weren't putting money in a sinkhole.
What a mess.
