To be honest, this may actually make sense to me.
It would allow multiple practical sets, doesn't have to use 3D; and can have live actors along with the digital based media. Plus, it would explain why this project would take more than a year, and that Dynamic should be working with Universal on another project *nudge*.
EDIT: In The Loop had a chance to chat with Dynamic last year, and got information on how it works, what it's capable of; and how it could be used in such a way.