It seems like developers are in a sticky situation these days graphics wise. They can either code their own engine or do the "if you cant beat-em-join-em" routine and use the graphic engine that propelled Gears of War to stardom. Not that im complaining about the Unreal 3 engine, it does look fantastic. and its now wonder the developers of Timeshift chose it as their engine. Here's a snippet from the IGN interview with Kyle Peschel, Timeshift Lead Producer :

IGN: You've said that the visuals in the old iteration of TimeShift couldn't compete in the post Unreal Engine 3 world. How difficult was it to completely revamp the engine and look of the game?

Kyle Peschel: Extremely hard, but it was the right thing to do. Saber Interactive has increased their team size over the last year to accommodate the increase in asset and programming needs. Ultimately you'd have to sit down and talk with the rendering programmers to get the full perspective on what they've accomplished in such a short time. As for the look, we found that "Steam Punk" simply wasn't resonating with people; endless feedback from users reinforced it. So when we had a crazy opportunity like another year, we seized it and started to generate an alternate reality that truly backs the new storyline.