Fascinating twitter thread by game professional Mike Bithell about the strategy Unreal is telegraphing with their recent Matrix Awakens tech demo:

Epic is attempting to flip the economics of game production towards film production.
In games, we build everything, so (and this is over simplification) game assets are a fixed cost. If I need 100 things, I need to pay for the production of one thing a hundred times. Efficiencies come in, but we're still building stuff from scratch.
An open world game? Only possible if you're a mega AAA company, or you wanna stylize to the point of affordability. Movies don't build a city, they find one to shoot in. They buy props and costumes. They hire actors rather than making westoworld style puppets.
Asset stores brought some of this prop shop and central casting mentality to games, but the problem is aesthetic consistency. If you buy 10 characters off the unity store and throw em in a game together, unless you did so very tastefully, it's gonna look shit.

With Epic offering a fully coherent city backdrop, including efficient rendering technology and consistent design across characters and architectures, Mike argues, it becomes cheaper than ever for game devs to tell stories in realistic settings. This introduces new tradeoffs:

But it also increases the quality bar and expense of doing anything that's not on the shelf. Alien characters? Metahuman with some forehead bumps added... 6 limbs is expensive and out of scope. Guns? Take a prop gun and stick something on it. 90s film solutions.

I think it's interesting to see Epic touting this just a year after Cyberpunk 2077, an ambitious platform play that nearly tanked its developer, CDPR.

Sure, Cyberpunk is a game. It's also an elaborate canvas of characters, settings, and content that they can use to sell a series of stories. Night City is enormous and immersive, and the initial story they shipped barely scratched the surface of all they built there. I suspect we'll see plenty of paid DLC over the next few years leveraging that investment.

CDPR was hoisting an enormous open world, full of systems that could be reused. The complexity of pulling something like this off is formidable, and in Cyberpunk's case, led to a disappointing initial release full of technical issues, especially for players on older consoles.

Epic, decades deep into the game engine business, understands most teams don't have the capital or risk appetite to undertake that level of investment, but sees a similar opportunity to build that kind of canvas and rent it out.

As Bithell says:

Movies don't build a city, they find one to shoot in. They buy props and costumes. They hire actors rather than making westworld style puppets.

The software economics of games continue to evolve.