An engine doesn't make a game cartoony or realisitic. It does not. All the engine does is display the graphics, shadows, physics, etc.. How they actually look is up to the Developer. You could make a game look cartoonier than WoW on the UE3 engine, on the Source Engine...it dosn't matter.
What makes a game look cartoony or realistic is:
1.)If the models look cartoony or realistic
2.)How the lighting in the levels are set up.
Those are the major factors.
If you wanted to you could make the crapiest looking game in the world on the UE3 engine.
The engine is just some code that the developer can use to interact with the user, hardware, and operating system.
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Open Ended gameplay, stealing cars, shooting people in third person, drive bys, and other things would fit very well with UE3.
Why not? The only difference between 3rd person and 1st perosn is the camera and the controls. That is the main difference. It isn't that hard to change a value on the camera. And no extra 1st person gun models. And the controls have nothing to do with the engine. Thats a developer thing.
Stealing Cars? That has nothing to do with the game engine. All stealing cars are is this:
-Player clicks button
-Engine detects model is near another model
-The other model is a car model.
-Plays an animation of you opening the door, throwing the guy out, and getting in.
Thats all that is done. Basically any decent engine can do that.
Helicopters? What does that have to do with a game engine? All they are is a model that is moving around in 3d space. They are no different than a model of a person person walking in the street. They are both moving around in 3d space. They both have collision code so they wont pass through other objects. They do have different controls and they are allowed to move differently. Those both can be eaisly accomplished on any modern engine.
An engine license would cost money you are right. Although im sure Rockstar has plenty of money. Although you would cut a lot of development time creating an engine and time is money.