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"This engine can't be run on the PS3 or 360. "

The engine could be run on consoles but they would have to reduce the details that is correct.

Again I am not saying that PCs are not more powerful. Bigger RAM and much more powerful graphic cards mean better looking games.

But again physic simulations (and other number-crunching apps like video decoding/encoding, audio processing, upscaling etc. pp.) are an exception. Here the PS3 is simply more powerful because these are the tasks that are much more efficient on Vector-processors (which is essentially what the Cell is).