During a recent press event in Tokyo attended by Game Watch Impress (via Edge), Square Enix detailed the Luminous Engine, which can simulate liquids and cloth as well as realtime reflections.
The Luminous Engine is designed with DirectX 11 support, has more advanced AI and allows for augmenting motion capture data. It can be used in developing both small-scale casual games and large-scale epic titles.
According to Square Enix, the new engine can lower development costs by 30 per cent and hopefully lead to quicker development cycles.
With the lengthy development cycles for past Square Enix titles, the Tokyo-based game maker needs to cut as many corners as it can in its development cycles. Save for the quality corner. Keep that.