We've already been wowed by the next-generation Unreal Engine technology that Epic showed at GDC. The new Unreal Engine demo is the new original Crysis, which showed us the upper limits (and beyond) of existing technology.
The Unreal Engine demo was running in real-time on three GeForce GTX 480 GPUs, but the engine isn't just for high-end computers. Epic already made it clear that the engine should serve as a performance and feature target for then next-generation consoles, like the PS4 and Xbox 720 (or whatever they end up being named). Besides just that, however, Epic is making its engine workable for portable gaming.
With the rise of the Apple App Store and the popularity of the iOS devices, developers see it as the new market for selling games. The growth in graphical power too in the iPad 2, which Epic programmer Tim Sweeney believes to be in line with Apple's 9-times-faster boast, shows that gaming on portable touch devices is here to stay. It's not anywhere near even what today's HD game consoles can do yet, but they're getting the graphical features. Sweeney told Gizmodo, "you can use the high-detail shaders we did during Gears of War."
Epic actually likes Apple's model of introducing new, faster hardware every year. Instead of getting a new console refresh every 7-8 years, as will be the case with the current generation of Xbox 360 and PS3, Apple pumps out a new one yearly. The sort of advancement is much like what PC developers are used to seeing.
Epic seems to be concentrating its mobile gaming efforts on the iOS, and there's a reason why Android is getting left out in the cold.
"When a consumer gets the phone and they wanna play a game that uses our technology, it's got to be a consistent experience, and we can't guarantee that [on Android]. That's what held us off of Android," Tim Sweeney said. "Google needs to be a little more evil. They need to be far more controlling."