Spencer's comment was part of a 2020 email that was included in the recent Microsoft document leak.
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What?

Nothing about Starfield is that amazing that you couldn’t replicate it in something like Unreal or even Unity.

Graphics are dead easy on either. Exploration is faked, it’s fast travel to a procedural terrain/level, with a few hand made destinations in between, nothing hard. Modular ship design? Simple. FPS RPG system, simple. Physics engines already exist, storing the location of player placed objects is trivial.

What exactly about Starfield makes you think an engine would need serious modifications for a SF-like game?

Check out my reply to the other person who asked the same thing, it’s more of a thought experiment of the limitations of OP’s idea that all studios could use one engine to accomplish any game. Starfield features some mechanics and systems that are almost vestigial at this point to the engine, but don’t exist inherently in Unreal.

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