Games Domain has posted an interview with Digital Extremes president James Schmalz, co-developers of Unreal and Unreal Tournament. The talk covers the history of the company, their involvement with the Unreal series, and what's up next for them. Here's a quote on the latter topic:

GDR: What can you tell us about your "Next Big Thing"? Unreal 2 engine perhaps?

James: It will be a First Person Action game, but with very different gameplay than we have created before. For now, 3d Action games are what we love the most but in the future, after our next game, we may shift focus to something else. Certainly at this point, 3d action is where our skills and interests lie.

As for the engine, Epic is highly enhancing the current engine even beyond that is in UT. This is great for licensees who need the engine to remain current and cutting edge in the coming year. It's got some seriously cool features that are being added that we are very excited about.