11:09 am PT -- Tim Sweeney's here to demonstrate the new features of the engine. Ambient occlusion dramatically improves shadow highlights, says Sweeney.
11:10 am PT -- We see Marcus Phoenix being rendered with better specular lighting. High density crowds are new -- we see a massive crowd of Locusts flocking through a Gears of War environment.
11:11 am PT -- Dynamic Fluid effects look... liquidy. Marcus Phoenix splashes through a pool to demonstrate.
11:12 am PT -- Matinee improvements -- it's what power the cutscene in Gears of War.
11:13 am PT -- Better structural degradation allows concrete to break apart in an explosion. Marcus k!lls an innocent concrete pillar with a Torque bow.