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"Deadly Creatures is one of Wii's prettiest games. When the title first boots, a black, simple title screen is perpetually interrupted by gorgeously animated and completely realistic tarantula models -- the same ones from the in-game sequences"

This is what i found, dunno if that means that it's in-game engine or not.

Source: http://wii.ign.com/articles/925/925753p2.html