Some german kids made a video game for a 96 kilobyte game competition. Everyone else's game were like pong or even worse, yet these people made an FPS with lighting and everything! Works best on powerful PCs, although you're welcome to try. Here's a screenshot: Mirror: http://kk.kema.at/files/kkrieger-beta.zip
It's many years old indeed, basically all they do is compress stuff WAY too much, that's also why it takes ages to load, they're uncompressing all the resources.
Wrong, but right. It's not compressed in the usual sense; all that is in the executable is code to render it. It's all real time, unlike most games that have prerendered textures and stuff. The long loading time is partly decompressing, but it is also rendering the graphics into ram. The 'kids' the OP speaks of are no strangers to feats such as this. Named 'Farbraush', they are a group very active in the 'demoscene' producing a lot of extremely impressive demos, a lot of which are in the 64kb category. One such demo of theirs, FR-08 .The .produkkt, contains the equivalent of 15GB of data in 64KB, which would be a compression ratio of 30,000:1 if it was prerendered.
they store the instructions for creating the worlds, not the created world. So, when you run the game, the world is created on your computer following those instructions.