A small web format (commonly abbreviated to 'SWF' and its plural form SWFs), is a flash file used for multimedia, vector graphics and ActionScript. The file format belongs to Adobe, currently being used in their program Adobe Flash.
SWF used to stand for ShockWave Flash file, however this meaning was eliminated and it was changed to small web format to avoid confusion.
An SWF, most simply, is a macromedia file. But it holds a deeper meaning to us Club Penguin players, of course. The reason for this is because without SWF files, the game would cease to exist, because Club Penguin was built out of, and runs with flash.
Every room, item, pin, piece of clothing, igloo, etc on Club Penguin is made from an SWF file. Small web format files first made their appearance back in May 1996 from FutureWave's FutureSplash Animator program (now called Adobe Animate), shortly after in December of that year, Macromedia acquired FutureWave and FutureSplash Animator became Macromedia Flash 1.0.
Back to Club Penguin. As I mentioned, every aspect of Club Penguin's internal game is flash-oriented. The game has been running this way since it's release in 2005, and all earlier versions and prototypes of the game from RocketSnail's Penguin Chat to Penguin Chat 3 were all flash-based.
When Club Penguin wants to make, say, a new puffle, the animators based in Kelowna would sketch out on paper the rough design for the new puffle, and everything after that from the first computer model to the final release is done in Adobe Flash. After many weeks or months when the puffle is finally ready, it is uploaded to one of Club Penguin's media servers to be put on the game. The file it is stored as is in a .SWF format.
"Great!" I hear you think, "Flash is awesome!" And you'd be right, however, it won't be awesome for much longer.
You see, flash is in danger, and most companies based around flash are putting their products at risk by using it, as flash becomes more unstable for web and mobile gaming rises, leading to bigger games ditching their once-loved flash format in favour for smartphone gaming. This is why Club Penguin is developing a mobile app, currently disguised as Project: Super Secret.
The controversy surrounding the death of flash has even spawned a website, isflashdeadyet.com, which helps to explain more and answer your questions. I'd suggest visiting it for more, this is just a brief article. The website's current standing is:
Is Flash Dead Yet?
No, but it's certainly becoming less relevant.
So there you have it, that's how Club Penguin functions with flash and SWF files, and that's why it's becoming a danger. Fear not, though, for Club Penguin will have Project: Super Secret up and running very smoothly before flash decides to give out on us.
I hope you learned something from What is an SWF? – a brief introduction to Small Web Formats (SWFs). Waddle on!