The power of one of the next-generation consoles was shown today as Sony and Epic Games showed off Unreal Engine 3 running in real time on the PlayStation 3. GameSpot had the opportunity to see Unreal Engine 3.0 at this year's and last year's Game Developers Conference, and while it was undoubtedly gorgeous, one couldn't help but notice that the then-cutting-edge PC hardware struggled to run it smoothly. The PlayStation 3 was the first time GameSpot editors have seen the graphics engine running in beautiful, smooth motion, and it's undeniably impressive.

The demo was given by Tim Sweeney, Epic cofounder and chief technology officer. A quick synopsis is as follows: The demo began with fiery explosions, one of which hurled an Unreal-style soldier clad in metal armor through the air. Sparks fly when the soldier slams on a metal walkway as he aims his weapon at the sinister-looking robot chasing him.

The soldier then fires his weapons and drops the robot, gets up and limps to the walkway's edge. However, the perspective changes to the robot's point of view, and you sees it reactivating and getting back up and then charging at the soldier. The soldier, sensing the danger, turns around and tries to raise his weapon, but the robot gets to him first and tackles him over the precipice. They fall to the platform below, and they both get up and stare at each other. Half the robot's head is shot off, and you can see the metal glowing around the shot-off area.

Somehow, the soldier's rocket launcher is thrown into the air, where it begins to slowly tumble. The robot slams into the guy and tries to crush him, but the soldier gets leverage and tosses the robot over another edge. He then catches the falling rocket launcher and pumps three rounds at the falling opponent, which explode and destroy it finally.

As a movie, it was a spectacular technological tour de force, and just to show that it wasn't a prerendered movie, Sweeney replayed the demo, then paused it and zoomed in and out, showing off various technological details.

The engine was running in 720p on a high-definition screen, about the equivalent of a PC's resolution, giving everything a sharp look. The engine also had perfect lighting and shadowing, with shaders that are approximately 200 times more complex than in the previous console generation.

What was most impressive is that the engine takes advantage of high dynamic range lighting, which allows for a very realistic simulation of real light and shadows.

The engine also uses per-pixel lighting and shadowing to capture the little details that, when taken together, are most impressive. It's no understatement to say that the industry has reached a new plateau in graphics, and we're looking at games that are on par with Hollywood movies.

Unreal Engine 3 is also a very interesting choice for Sony to demo, as the engine is extremely multiplatform. Epic is primarily a PC developer, and the company is already using Unreal Engine 3 in its game for Microsoft's Xbox 360, Gears of War.

The early screens of Gears of War, as well as early gameplay that we saw at the Game Developers Conference in March, indicate that Unreal Engine 3 will look as impressive on that platform as it does on the PS3. And as PC graphics and CPU power inevitably improve over the next year or so, we'll be able to see that level of graphical prowess on desktops.

So the good news is that Unreal Engine 3 looks good to go on next-generation consoles and PCs, and gamers will be better for it by a large margin.