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So much fanboyism on both sides of the fence.

The only problem I have with the original post is the suggestion that developers licensed UE3 after seeing Gears of War. That is simply not true. Each successive iteration of UE is a hotly anticipated event, and UE3 had been licensed to developers long before Gears was released (e.g. Rainbow 6: Vegas, which uses the engine, was released around the same time).

I think you need to take a look at the number of games that have used the Unreal Engine ever since it's first incarnation. Let's just say it's a sh*tload, and I'll wager that licensing the engine has been Epic's primary source of income for over decade.
They would turn a profit even if they didn't release their own games at all.