During a GDC behind-closed-doors session earlier today, Epic’s Mark Rein blew the lid off a new, next-gen focused version of Unreal 3. Yes, next-gen. And he was abundantly clear about it: this stuff won’t run on current consoles. Bar, you’ve just been raised.

“This is our proposal for what the next generation of gaming is going to be,” Rein said as the demo began.

We were immediately introduced to a rain-spattered neon sign proclaiming “powered by Unreal technology.” The scene: a gritty, dilapidated cityscape. It’s night time, and the streets are slick with rain. All manner of signs and electrical lights are reflected in the gloomy mix of rain and atmosphere that’s pooled on the ground. Par for the course with modern games, though, right? Here’s the thing, though: all of it honestly, actually – no hyperbole – looks like CG.

“The whole idea behind this is to tell the hardware manufacturers that this is what you should be doing down the road,” Rein explained while the demo rolled.

“The whole idea behind this is to tell the hardware manufacturers that this is what you should be doing down the road.”

Next up, we were introduced to a trench coat-clad, cigarette smoking man who was attempting to break a chain with a welding tool. Shades of Deus Ex? You don’t know the half of it. While the man did his presumably dirty deed, we were given a close up on his face, which was coated in tiny rivulets of rain. The man himself was expressive, his face subtly shifting and cringing as he focused on his work. Meanwhile, light from the welder reflected on his face, dancing about as the flame sparked and sizzled.

After the chain’s brittle links gave way, the man smoothly lit his cigarette with his welder. Then he heard something. Quickly scaling a nearby roof, he glimpsed multiple armor-clad soldiers kicking an elderly woman curled up in the fetal position on the ground. And that’s when things got interesting. The man turned his skin into some form of hyper detailed rock – craggy and detailed down to each individual pebble – and leaped right into the fray. He proceeded to brutally punch two of the soldiers, shattering one’s face mask and revealing a grimace that looked just about ready to collapse in on itself underneath. With those two dispatched, he shot the third straight through the head, leaving him slumped against a nearby billboard.

Next up, another celebratory cigarette, because why not? This guy’s so cool, cigarettes are afraid of getting lung cancer from him. But as he prepared to take another puff, a giant, house-sized “Samaritan” robot sneaked up behind him. He turned to meet it, noting its colossal size, and then did what any logical man would: turned to stone and started punching. End of demo.

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Some things to note: this was only a tech demo – not a new game. Not that we’d mind if Epic made a Deus Ex-like action game, but we digress. Also crucial: Rein noted that the demo was running on three Nvidia GTX 580s. For the non-technophiles among you, that’s off-the-shelf, readily available (albeit ultra high-end) hardware. You may very well own a similar configuration right now. Also, while the screens below are definitely indicative of what the demo looked like, they don’t do the fluidity of movement, animation, and physics justice at all. Again, this looked like a highly choreographed CG movie, but in reality, many of those things were being calculated by robust physics engines. The Epic staffers running the demo then proved that to us, replaying the demo and detaching the camera, zooming in and out, and showing us how things looked with physics turned on and off.

“The engine now scales all the way from an iPhone 3GS up to next-generation hardware. That means you could theoretically make a game that’d run on every single one of these devices.”

At the end of the day, though, this isn’t Unreal 4. It’s still definitely Unreal 3, Rein was quick to clarify. He added, however, that if this were to be given a number, it’d be Unreal 3.975. He also noted that this is a bigger leap than the one between Unreal 2 and Unreal 3 – and it shows. On top of that, it’s versatile as all get-out.

“Another thing that’s awesome is that the engine now scales all the way from an iPhone 3GS up to next-generation hardware. That means you could theoretically make a game that’d run on every single one of these devices. Mobile phones to tablets to set top boxes,” said Rein.

The coolest part of all? All this technology is in Unreal licensees hands today. When Epic updates, so does everyone else. The whole gaming industry’s been sort of reluctant about a next generation of consoles, but Epic – and the rest of the tech business – have other plans.

“If the next game consoles can’t do this, well, Apple increased their iPad by nine times today,” Rein said.

Them be fightin’ words, gaming industry. It appears, however, that Epic will be providing your most powerful weapon.