Andy Ink taco (actually his name is Ihnatko, but I thought that was an amusing autocorrect typo) just tweeted about lens flare in a Lara Croft video game ( twitter.com/ihnatko/status/209698436038131713 )
Lens flare is a (usually) unwanted artifact caused by a strong light hitting the front element of a lens. The initial vector of the light doesn't have to be pointed at the film, i.e., the light source is not visible in the scene. The light hits the front element, bends and reflects and does some "optical shit"' that I learned about in high school physics and now can't remember. The point is, that it's basically noise, and detracts from the goal of creating "suspension of disbelief", making people forget theyre sitting in a movie theater watching a movie.
I believe the "meaning" of lens flare in games is to provide the illusion that the game is a movie, since movie level realism is a goal of many video games.
Lens Flare has been used as a Style in movies, as well, but I've always considered it to be crappy and trite. Let me explain why. In the late sixties and the seventies, a new crop of movie makers emerged that were outside the studio system. Since they were "emerging", they were forced to work with small budgets and on locations.
Being future greats, they worked with these limitations, harnessing them to make their movies more realistic. Thus you get the gritty realism of Mean Streets. When an artist is forced to work with difficult limitations, they turn those limitations into virtues when they can. Other times they make trade offs. An example would be lens flare. It's harder to control outside of the studio, while on location. Imagine you have a crucial shot with lens flare. You have to decide if you can live with it, or if it's worth reshooting, possibly pushing other shots back, or losing them entirely, how long you have the location for, how long it will cost to rent it another night, whether it's even possible to rent it another night. There's risk involved every step of the way, especially when you want to do something "extra", even if it means taking ten minutes to make adjustments, then reshooting the scene two or three times more. So: important scene with lens flare, but the flare is off in the corner, yes, we'll live with it, chicken at 8:00, moving on people, next set up.
I think it should be noted that (AFAIK) flares of the lens variety were not considered to be a style by directors like Scorcese or Coppola. As proof, I would argue that this shoddiness disappears for the most part when they began working with bigger budgets. It drops from their stylistic language, because it never was an intended part of that language.
Great directors spur imitation. It was the imitators that made lens flare into a style (to the degree that they used it intentionally, and not just because they were dealing with the same limitations as Scorcese). Rote imitation, the result of lack of skill or understanding.
I also found it interesting when lens flares showed up in AfterEffects. There is a "legitimate" use for it: matching a shot that has lens flare. Since lens flares can be generally fixed in post, this legit use is rare, but it exists. Still, as a grip, a guy who has spent many hours chasing a steadicam, holding an 18" x 24" solid flag (still shooters call them gobos, I think) above the lens to shield the front element, while keeping the flag out of the shot, and then seeing folks intentionally adding lens flares, well, it's quite amusing.
I'm not saying that there is NEVER a reason to intentionally use lens flare. I'm just saying that those times are rare, and you should avoid it, if possible. But that's just me.