Actually, it shows in the first video that you can interact with the materials in real time in the 3D graphics package, albeit with less accuracy. So it shows the use of the mouse to drag a data point and stretch a squishy, gummy object that breaks and snaps back. That was real time interaction. Of course it didn't have nearly as many data points as the high res renders at the start, but I was still very impressed by that real time use of the engine.
That means that if can surely be used for 3D games as well.
Definitely cool tech, but while some of the underlying techniques might translate into simulating videogame physics, it's highly unlikely anything from this package will.
It's a different problem domain. An effects system for movies will have tons of configurable knobs and parameters, allowing the artist to tweak it so it's exactly right for that shot. Some of these settings will produce interesting and gorgeous effects, but they're designed to allow maximum customizability. If the system has some artifacts in particular situations, they can easily be worked around by tuning some knobs, adjusting the camera angle, etc. Hell, you can even paint in 2d over the final output frame.
In a game, the effects have to look good from all angles and in all situations - many of which you don't know in advance. When I wrote a cloth simulation for a game, most of my time wasn't spend developing the core sim (which took all of an hour or two), but actually spent making sure the cloth behaved appropriately under all circumstances - even when the player would make sudden, exaggerated movements and animations (some of which weren't even physically possible).
Those real-time versions for modelling packages tend to be really rough approximations using the same code, and not worth the time it would take to optimize for a real, resource-restricted environment like a gaming console.
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.
That means that if can surely be used for 3D games as well.