Sony announced it has licensed the Unreal 3 engine technology from Epic Games. This means Sony Computer Entertainment Inc (SCEI) will now be able to use the game engine and its development tools to create games based on the impressive Unreal 3 engine. An evaluation version of Unreal Engine 3 will now become available for the PS3 dev community together with a software dev kit for the PlayStation 3 console.
The Unreal 3 engine is one of world's advanced engines with a programmable shaders tool, physics engine, GUI based physics attribution tool, along with various other tools such as scenario development, movie scene development, animation and particle animation tools. More details at The Inquirer