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Definitely pre-rendered, There's no way the 3D0 could do graphics like this in real time. If the game was anything like the Virtual Boy version than it's definitely for the best that it was never released.
Judging by the movement, gun tote and ammo count on the bottom of the screen, I assume that this was pre-rendered BG for some sort of FPS or perhaps Virtua Cop type of game. And that the game was shelved before the enemies and events were programmed into the final product.
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because if it is, then...... wtf this game was like 10 years ahead of its time!
I'm sure this is FMV cutscene