Unreal Engine 3 is more than just a physics engine... 

http://www.unrealtechnology.com/html/technology/ue30.shtml

Speaking of Unreal Engine 3, Sega just licensed it on May 16, 2007 and gave out this press release (keep in mind that UE3 isn't avaliable for Wii) (Hmm to me this sounds like *gasp* new games for the 360 and PS3):

http://www.sega.com/corporate/corporate.php?item=pr_20070516a

SAN FRANCISCO & LONDON (May 16, 2007) - SEGA® of America, Inc. and SEGA® Europe Ltd. today announced a licensing agreement with Epic Games to adopt the Unreal® Engine 3 for use in several upcoming projects being developed in North America.

"SEGA is pleased to arm our developers with the sophisticated tools contained in Epic Games' Unreal Engine 3," said Simon Jeffery, President and COO, SEGA of America, Inc. "Its versatility and power will help SEGA create incredible gaming experiences."

"Epic is extremely excited to be working with SEGA," said Mark Rein, Vice President, Epic Games, Inc. "SEGA has a long history of innovation and leadership in our industry and we're honored that they've chosen to use Unreal Engine 3."

Details of the projects currently being worked on will be announced later in the year.

OH NO Activision has licensed Unreal Engine 3 on Feb 26, 2007. Jesus H. Christ don't they know that the 360 and PS3 are dead and software is going to dry up for them in 2008/2009?  Maybe we should email your prediction right away before they do something foolish like actually develop a game with it.

http://www.gamespy.com/articles/767/767928p1.html

Activision Licenses Unreal Engine 3
Hopping on the ever-growing bandwagon, Activision has licensed the uber-popular graphics engine.
By Nate 'NateDog' Ahearn | Feb. 26, 2007

Activision announced late last week that it'd be licensing Epic Games' Unreal Engine 3 (UE3 for short). However, no details were released on specific games that would make use of the engine. The UE3 engine has been licensed by several major publishers and developers, including the likes of Microsoft, Sony, Namco, Midway, Real Time Worlds, and VU Games among many others. The engine is already powering such games as Gears of War and Rainbow Six: Vegas.

"The Unreal Engine is one of the most technically advanced engines on the market and is a perfect fit for our upcoming action game...The engine's robust suite of programming tools will enable our development team to deliver what is sure to be an amazing game experience," said Laird Malamed, Activision's head of production.

Sega also anounced NiGHTS for Wii, a huge budget title and revival of a major franchise.  I agree though that it likely shows them beginning development on something (though it could just be another godawful 3D sonic, again the old IPs deal.  We don't really know enough to discuss that).  I'm pretty bored of this, as it will end in the same way these always do... we agree to disaree.  In my opinion there will be a dryup of PS3 and 360 games in 09 and a boost of Wii games in late 08 by 3rd parties.  Keep in mind I have never said the PS3 or 360 are bad, I like both systems and intend to own both when finances allow, I just don't see the majority of games, or even big budget games, resting on the 2 systems this generation.

Activision also anounced much increased Wii budgets and development, stating that they think there is real option for a lot of profit on it.  Again though, read my last post.  I'd consider this discussion over as it's largely based on our individual opinions and perceptions of the direction of the industry.

Windbane, seriously, stop being such a douche. It's common misknowledge that the GC version of SC2 sold best.

Additionally, most other sites have different numbers that say the GC version DID sell best.

Ok my head is about to explode because apparently Capcom licensed the Unreal Engine 3 in 2007 as well.  Damn you to hell Capcom!!!!  Who cares if you have million seller games on the 360, don't you know it's a dead horse and games are going to dry up on it?  There's no use making anymore hardcore games for the machine because 360 users are going to simply stop buying your games to get in on the party game action on the Wii.  Didn't you guys get the memo?

http://www.bit-tech.net/news/2007/02/28/Capcom_licenses_unreal_3_engine/

Capcom licenses Unreal Engine 3

Author: Brett Thomas
Published: 28th Feb 2007

Epic's Unreal Engine family has been made use of in countless games, including some of the most notable of the FPS genre. The newest baby, Unreal 3, has already been used in blockbuster titles like Gears of War. Now, it appears another company is adding its name to the licensing rolls.

Capcom Co., Ltd., makers of both the Resident Evil and Devil May Cry series of games (as well as countless others), has recently licensed the new technology from Epic. Apparently, the company is making an undisclosed game with a North American studio, and the title / subject matter have been pretty well covered up.

Though it's not unusual to cover one's products up until nearer to launch, Capcom has repeatedly made some pretty blockbuster titles. Therefore, one tends to sit up and take notice when a big name like the Unreal Engine is dropped without some context of what it's being used on. Time will tell, we suppose.

Ok I'm a little confused...  Sonic is an old IP but NiGHTS is the revival of a major franchise...  Exactly what is your definition of an old IP and what is a revival of a major franchise?  That one is on the Wii and the other on the 360 and/or PS3?

Wow, why are people still attacking Windbane on this topic? Do the numbers need to be posted again? Soul Calibur II on the PS2 outsold the GC version. The end.

Can you please not call him a douche? He's been remarkably calm throughout this discussion. You look particularly bad calling him names when is correct.

http://vgchartz.com/worldtotals.php?name=soul+calibur&console=&publisher=&sort=Total

See? Right there. The PS2 version sold (approximately) 300,000 copies more than the GC version.  

Nights?!  WHAT?!  I thought the Wii was only getting new IPs!?  Oh noes...