Like what?  Engine stuff?  As a level designer, I don't know a lot but I have worked for two different studios with one licensing an engine and the other building their own.

For studios licensing an engine, there's still a significant cost there.  They don't just pay a small fee and then are done with it.  They have to license the engine and then they have to tailor it to their games specific use which is no small chore.  After that, there are still things to be done and then of course royalty fees once the game is actually released. 

Licensing an engines, I believe, isn't so much a money as it is a time saver and keeps your team size down.  So actually I guess that means it does mean it costs money, but it's more about saving time and people rather than money.

Building your own engine is pretty much the same except minus the licensing/royalty fees and adding the development costs.  I would imagine it's more work and money (in fact I'm sure it is) but you also get the bonus of being super familiar with the engine, the option of licensing it *if* it's good enough (which requires more work and money), and the engine being talored specifically to your own game.

If you're shooting for something technologically impressive, you might use some middleware subcomponents (for physics and AI, perhaps), but your engine, in general, will probably not be.

I would wager that Killzone 2 uses relatively little middleware, and was mostly done in-house, as most 1st party exclusives are likely to be.

First to point out something in an earlier post, Apple IS getting sued for their iPhone commercials. Maybe not in the US because nobody seems to give a flying fuck anymore and the general public has just become drones of advertising. But I know for a fact that at least 3 of the iPhone commercials have been completely banned in the UK for false advertising.

On the note of the development time of Killzone 2. The development of the game had to have started before E3 2005, quite a bit before. When so first showed the game footage they have said that everything on screen was "in engine" and that it was a target render. What that means is that they already had the engine running a game and what they were showing was what they hoped to be able to run in real time.

"in engine" is a very slipper term because you can use it but what is shown will be beyond what is capable in real time. They can construct extremely high poly models and ridiculously high res textures and the engine they are using will be able to run it, but in order to get 5 min of video, they would have to let the hardware run for maybe 30-60 min depending on the variables.

So the initial footage that was shown was recorded from the game engine itself, its just not real time gameplay. That being the case, the art team was at work for quite a while before they released that footage, i guarantee it, you can' make something look like that in a couple of weeks.