The second video, embedded after the break, shows off a cottage being constructed inside the Offset engine. The cottage is apparently a prefab, which is essentially a reusable asset for game design. Objects are added to the structure and several textures and graphical effects are added on the fly. The video certainly makes it look easy to create objects within the game world, though we'd like to see something made from scratch.
Sadly, neither video features any gameplay. There are no giant trolls and stealthy elves this time. Project Offset's Sam McGrath promises there will be "much more" in the upcoming months.