BIZ: Given that you were able to make Gears of War with that size team in two years for $10 million using Unreal Engine 3, why haven't we seen more blockbuster games using this technology?

TS: Unreal Engine 3 gives the designers an unprecedented amount of control over a game. It's hard to say why there aren't more AAA blockbuster games. There's no technical or workflow reasons that there aren't more hit games. I guess it's like Hollywood, where you have a handful of blockbusters and a lot of other movies that don't do well.

BIZ: Speaking of Hollywood, What are your thoughts on Unreal Engine 3 being used by movie and television studios?

TS: The introduction of Unreal by Hollywood is really neat. They're actually creating backdrops to some TV shows using the engine. It's all done in real-time. We're starting to see this be adopted by movie production houses for films, which is crazy. When you look at the history of Hollywood they started out with extraordinarily powerful movie business tools that are heinously slow. On the other end, we have simpler and less powerful tools that are completely fast in real-time.

BIZ: What impact do you see Unreal having in filmmaking and television production?

TS: As we've seen in game development, when you give artists tools that make modifications instantly and see results instantly they create an entirely higher level of productivity. Even if our tools are simpler and less powerful, they allow artists to do cool stuff faster. I think in many cases that's better. We're about to see a complete inversion of that marketplace where real-time game tools take over. Artists time being so valuable, they don't want to wait around for a day for pre-visualization of their scenes; they want to see it right now. If they can see it right now, they don't need as many special effects as they would have had in the offline rendering case.

BIZ: Nvidia had its new GeForce Stereoscopic technology running on the show floor here. What are your thoughts on the impact of 3D technology on gaming?

TS: I haven't seen anything in 3D that actually works quite yet, but I think there's a lot of potential in that in the very long term. When you look at Moore's Law the improvements in LCD technology in picture quality and 3D will just get better in the future. You'll see that become viable really quickly, even if the first few generations of that aren't ready for prime time.

BIZ: Epic has grown recently through acquisitions. What impact has this had on the Unreal Engine 3 technology?

TS: What attracted us to Chair Entertainment was they shipped this really excellent Xbox Live Arcade game, Undertow, an under 50MB download that proved you could use the engine for that type of environment. That was attractive to us. We're looking at bringing their optimizations and space reductions back into the engine so licensees can use that.

BIZ: And what did Polish developer People Can Fly bring to the table?

TS: The People Can Fly team licensed UE3 and then just a few weeks later they showed us this really cool new IP they were working on. We were really blown away by how quickly they'd done that. We had them help us work on Gears of War on PC and they did a stellar job with that. Soon after that they showed us a new project that they were going to start from the ground up and we bought 60 percent of the company. They're building their great game and we're building our great games and by combining forces we can get great world class marketing support for them.

BIZ: Thanks for your time, Tim.