Thinking the same thing Tyler, maybe it's a long term stratagy. Not complainging though, competition in this market is great to see even after the awesome terms UDK has served up lately (they probably knew this announcement was coming). I would have expected Crytek to narrow their focus a bit and carve out an immediate…
Definitely would be interesting to give it a poke and see what the ui and setup's like compared to UDK. Gotta say even with working in just the fx area of UDK it can be a royal pain to get anything done.
"Upper Hand" is relative though. When you are running an MMO and a third of users play your games on computers with onboard video, is realtime lighting an upperhand? Baked lighting can mean drastically better graphics for lower end machines.