Featires of your dream 3d engine?

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Tools are the single most important thing an engine can provide to have decent looking artwork. The UnrealEngine stuff we show looks so incredible due to 2 things:

1) We have kick ass artists
2) We have kick ass tools. UnrealEd has a visual, node based material editor and the artists have produced amazing results with it.

Give them the tools and they'll take you places you never expected. Make them go through a programmer or type/edit text files and you're cutting your games throat.