Rockstar Games is using NaturalMotion's Euphoria engine in its next-generation PlayStation 3 and Xbox 360 titles.
The two companies have revealed that work is already well underway following several months of close collaboration between the Grand Theft Auto publisher and the Oxford-based animation specialist.
"In Rockstar, we have found a partner that shares this vision, and is renowned for creating some of the most ground-breaking and immersive games in the industry," commented Torsten Reil, CEO of NaturalMotion.
"Euphoria is about giving people an interactive experience they have never seen before. We now have the processing power to simulate humans, and the possibilities for games are endless," he said.