Unreal 4 is much more of a finished engine, as their aim is to make money from it by licensing it to other developers. Square Enix's engine is to be used only by their teams as the main engine powering all of the games they'll produce next gen (they're looking for a unified engine, instead of different ones powering different games), so they have more time to prepare, hence it's still being constructed.

UE4 really looks like a current gen PC engine, that demo is being run on a 680, which means my crossfire setup can handle a game like that in full screen just fine.

BAH! They need to fucking stop that shit and have a unified optimized physics engine in Open CL or some shit.

at least it's PhysX v3 which can take advantage of multiple CPU threads and also takes advantage of the latest X86 extensions so it in theory won't run like utter shit without a Nvidia GPU. 

I do agree that someone needs to get a OpenCL accellerated physics engine up and running, unfortunately PhysX's closes competitor Havok is owned by Intel who have a vested interest in keeping physics on the CPU.

Well all their RPG games anyway 

http://www.vg247.com/2012/06/07/square-enixs-luminous-designed-for-rpgs-and-action-rpgs/

Epic Reveals Stunning Elemental Demo, & Tim Sweeney on Unreal Engine 4

http://www.geforce.com/whats-new/articles/stunning-videos-show-unreal-engine-4s-next-gen-gtx-680-powered-real-time-graphics/

What are the key design goals for Unreal Engine 4?

We have three big goals:

First, to define the next generation of graphics capabilities that are achievable with DirectX 11 PC’s and future consoles.

Second, to deliver a toolset with an unprecedented mixture of power, ease-of-use, and polish.

And finally, to scale the technology and its feature set up and down the spectrum of future computing devices, including iOS and Android, and mainstream PC.

What is the target platform for UE4? What kind of hardware are gamers going to need to run UE4 based games?

Unreal Engine 4’s next-generation renderer targets DirectX 11 GPU’s and really starts to become interesting on hardware with 1+ TFLOPS of graphics performance, where it delivers some truly unprecedented capabilities. However, UE4 also includes a mainstream renderer targeting mass-market devices with a feature set that is appropriate there.

What is Global Illumination and why is it so important to game realism?

Global Illumination refers to the calculation of light bouncing around a scene. GI is responsible for many of the subtle shading effects and ambience we see in real-world environments, as well as glossy and metallic reflections. Introducing real-time Global Illumination into Unreal Engine 4 is the biggest breakthrough in lighting since Unreal Engine 1 introduced real-time Direct Illumination in 1995.

In Unreal Engine 4, there are no pre-computed lightmaps. Instead, all lighting, direct and indirect, is computed in real-time for each frame. Instead of being stored in a 2D texture, they are stored in voxels. A voxel is a pixel in three dimensions. It has volume, hence the term "voxel."

Other game engines also claim to have real-time GI in one flavor or another. What makes the UE4 implementation unique?

Techniques such as Light Propagation Volumes have shipped in past games, and provided an approximate solution for real-time diffuse Global Illumination. The SVOGI solution in UE4 is unique in that it allows a full-scene indirect specular and reflective solution. This solution is key to the realistic rendering of metallic and glossy surfaces.

How has the PhysX engine evolved in UE4? How is it used in the demo?

We used PhysX for all collision queries in UE4, and all the physics objects you see in the interactive part of the demo (hammer, statues, planets etc).