UE3 is still a good engine, the only issue is that it doesn't have the tools like the quick compile that allows devs to almost instantly see their changes etc that speed up development in UE4. I am pretty sure that Cryteck said that the Cryengine would be comming to the Wii U so that could be a good option for devs that want to license an engine for Wii U games. And any devs with existing engines for current consoles should be able to port across with little effort, which Vigil did for Darksiders 2, and I think Platnum Games probably ported their engine over for P-100. I expect that CAPCOM will port over MT framework as they already have that up and running on the 3DS theo they don't licence out.

I don't think High Voltage, as they currently stand, are in a position to support such an engine... but I do think, based on Quantum3, that they are in a position to make it. I'd expect Nintendo to be the ones providing support. I think that nobody licensed Quantum3 from HVS because HVS didn't license it out - that is, they weren't in a position to support it enough, so it remained in-house. But with Nintendo backing, HVS would be able to build stronger support services, while Nintendo would take up the rest of it.

Actually, I'd love to see Nintendo buy HVS and make it a first-party engine developer, perhaps splitting it into an engine studio and a game development studio... the engine studio being the valuable one. Imagine the sort of technical quality that HVS brought to the Wii (or rather, the Wii U equivalent) being used by Nintendo themselves for their games, with all of Nintendo's aesthetic quality. And if Nintendo could provide a world-class engine for use on games exclusive to their systems, it would probably be yet another sweetener towards putting exclusives on their systems.

And yes, CryEngine 3 is confirmed to have already been ported to the Wii U - Crytek said that they weren't yet planning any games for the system, but they were supporting their engine for it. Based on comments by John Carmack, it looks like id Tech 5 is also going to be available (although it isn't yet - he spoke positively of the Wii U, and implied that it would be coming, but that it hasn't officially been decided yet). MT Framework was already available on Wii - it was used RE: Darkside Chronicles and two Sengoku Basara titles - so it's pretty much a given that it or an improved version of it will be available for Wii U (Resident Evil 6 is probably going to be on the system - note that no Capcom games have been spoken of for the system, yet, even though it's a given that they'll support it at least a bit).

The problem with id tech 5 is that only games published by Bethesda can use it and even in that so far only 2 studios are using it are id themselves and MachineGames and we have no idea what they are working on.

I don't see why they couldn't combine the two - buy HVS, and transfer Retro's engine developers into it. I don't think HVS is a below average studio, I think they're just weak at making popular games. Their engine development appears to be top-notch, and that's the real value.

Also, while id Tech 5 hasn't been used in any bar Bethesda games, and id Tech 4 also wasn't used outside of Bethesda/id, id Tech 3 was used by numerous other studios, including Infinity Ward (for the original CoD) and 2015 (for MoD: Allied Assault). So clearly they are willing to license it out. If id Tech 5, which is their newest engine, is useful and runs well on Wii U, I could certainly see it becoming a popular engine for Wii U, especially if they put the effort in to really utilise the Wii U's capabilities.

And id Tech 4 was not a popular engine but it was used for Prey. Id have really fell behind in engines, Carmack's insistence on keeping the engine team small so he can have complete control has really held them back as other studios have pilled on large teams to develop engines. Bethesda have said officially that it won't be licenced to any game that is not published by them.

The notable thing about Quantum3 isn't so much that it pushed the Wii, it's that it correctly used the TEV, which is something that few studios did. And the result was an engine that was far beyond any other Wii engine in terms of what it could do. There were graphical effects seen in The Conduit that you don't even see in many PS3/360 titles (not saying they weren't capable of it, but that they weren't trivial to add). Of course, the game wasn't a great one in terms of anything else, but technically, the graphics were superb.

And while Bethesda did say that they wouldn't license id Tech 5 out to game published by others, that was two years ago, and if people wanted to use it for Wii U exclusive titles, I don't think they'd turn it down, if UE4 isn't available - I mean, UE4 would be their main competition for licensing out. But anyway, when I said "available", I didn't necessarily mean available to all developers, just that it would be officially ported to the Wii U.

Which is why I don't understand why Epic aren't supporting it themselves at least officially. I assume there is some technical or I guess business reason why they don't. The fancy new renderer is designed for 1TFLOP+ DX11 class hardware for it's bells and whistles but I am pretty sure they said they have a striped down version (No realtime voxel bassed Global Illumination with a full deffered pipeline I would imagine) for older less capable hardware like phones, I would have thought they would port over to the Wii U even if it was just to have that checkbox for the engine. But for some reason Epic seem to be perfectly happy to push UE3 for Wii U it remains to be seen if it's a technical limitation (I doubt, but without knowing all the details it's hard to tell) or just that Epic just don't consider it worth the time (little or no demand from licensees for Wii U support).

It could be something close to what Smilebeast, albeit less dramatic.

Simply put, Epic wants/needs to sell their new engine and to do that, they need to show what their new engine can do and powerful machines that allow them do show it. The best platforms for that are Microsoft and Sony's new consoles, and they need them to be as powerful as possible. How? Well, for instance they have said numerous times what kind of hardware they want (specially with RAM), but so far the leaked specs suggest that neither PS4 nor the nextbox will something like a GTX 680.

So they go a little further and say that they won't support WiiU with UE4, that for the power it has UE3 is still good. This is a message to Sony/Microsoft. It's a last try to force them to beef up their machines because Epic knows that they want to be able to say "we can run UE4".

I don't know how it will end, but if WiiU does well, I wouldn't be surprised if Epic announced UE4 for it about 1 year after its launch, once the other consoles have their specs confirmed.

But part of the draw of UE is it's scalability, they have already said that UE4 will be scaled down to phones and tablets albeit without a lot of the fancy bells and whistles. Tho they haven't confirmed that it's comming to any existing mobile platforms so they may be waiting for some more advanced tech, such as some DX11 class hardware with compute shaders and tesselation support I guess. The next iteration of Tegra from Nvidia does promise DX11 support. So I guess it is possible that how it's architected now UE4 requires DX11 class hardware at a minimum and any port to a platform without a DX11 class GPU will need a new renderer which makes sense and also explains why Epic havn't announced any platforms other than PC for UE4 so far.

It also makes sense to have that split while keeping UE3 around to support older platforms, which is why they are pushing UE3 for Wii U and why Infinity blade dungeons is not UE4.

True, but how many tablets/phones use Tegra?

You may be right, but... I think there's something else that we don't see.