Warning: Wikipedia contains spoilers.
The "Ringworld" is an artificial ring about a million miles wide and approximately the diameter of Earth's orbit (which makes it about 300 million miles in circumference), centered about a star, and rotating to provide an Earthlike artificial gravity, with a habitable flat inner surface equivalent in area to millions of Earth-sized planets. Walls 1000 miles tall along the edges keep in the atmosphere. The Ringworld could be regarded as a thin slice of a Dyson sphere, with which it shares a number of characteristics.
"Ringworld" has become a generic term for such a structure, which is an exemplar of what science fiction fans call a "Big Dumb Object".
In addition to the above-mentioned video games, the plot of the first-person shooter Halo for the Microsoft XBox also takes place on a ringworld, though with no reference to the Niven novel.
The construction of a ringworld remains firmly in the area of science fictional speculation, since although if such a structure was built, it could indeed provide a huge habitable inner surface, the energy required to construct and set it rotating is so massive (several centuries' worth of the total energy output from the Sun) that without as-yet unimagined energy sources becoming available, it is hard to see how this construction could ever be possible. Furthermore, the tensile strength of the material required would be on the same order as the strong nuclear force; nothing even remotely strong enough is known to exist in nature.
Additionally, a ringworld design requires active stabilization, because it is not in inertial orbit. Though the ring itself is rotating at 1200 km/s (to approximate Earth gravity), the center of mass does not move at all. Large thrusters must be incorporated into the design to keep it centered about its star.
To provide an approximation of the day/night cycle common to planets, Niven's Ringworld was also provided with a separate ring of "shadow squares" linked together (by "shadow square wires") in a ring close to the star. These absorb a huge amount of sunlight energy, which is beamed to the Ringworld as its primary source of power. They are also not in inertial orbit, and must be actively stabilized as well.
The novel Ringworld has been followed by two sequels, The Ringworld Engineers and The Ringworld Throne. A fourth book is announced.
See Dyson sphere