Don't expect any games any time soon though.
Unreal Engine 5 - Nanite

"Nanite" and "Lumen" are going to be the new buzzwords for the next few years. Those two terms were the highlight of today's reveal for the Unreal Engine 5. The engine, still very early in development at Epic, won't be released to the public until late 2021. An early preview will be made available to some in early 2021. This engine is being built to support current-generation consoles, next-generation consoles, PC, Mac, iOS, and Android.

It must be said though that I cannot imagine there will be many, if any, current-generation games made using Unreal Engine 5. By the time this engine is in the hands of developers and they start working with it, it's entirely possible the first games won't hit until at least 2023. While I am sure the Xbox One and PlayStation 4 will still be around in some capacity, the next-gen Xbox Series X and PlayStation 5 will have been around going on three years already.

Today's first ever look at Unreal Engine five was provided by way of a real-time demo running on PlayStation 5 hardware. The trailer itself is called "Lumen in the Land of Nanite" and includes a look at two of the new core technologies that will make their debut in Unreal Engine 5.

Nanite virtualized micropolygon geometry frees artists to create as much geometric detail as the eye can see. Nanite virtualized geometry means that film-quality source art comprising hundreds of millions or billions of polygons can be imported directly into Unreal Engine—anything from ZBrush sculpts to photogrammetry scans to CAD data—and it just works. Nanite geometry is streamed and scaled in real time so there are no more polygon count budgets, polygon memory budgets, or draw count budgets; there is no need to bake details to normal maps or manually author LODs; and there is no loss in quality.

Lumen is a fully dynamic global illumination solution that immediately reacts to scene and light changes. The system renders diffuse interreflection with infinite bounces and indirect specular reflections in huge, detailed environments, at scales ranging from kilometers to millimeters. Artists and designers can create more dynamic scenes using Lumen, for example, changing the sun angle for time of day, turning on a flashlight, or blowing a hole in the ceiling, and indirect lighting will adapt accordingly. Lumen erases the need to wait for lightmap bakes to finish and to author light map UVs—a huge time savings when an artist can move a light inside the Unreal Editor and lighting looks the same as when the game is run on console.
In short, Nanite is a way to import super high polygon scenes from other systems directly into a workable scene in Unreal Engine 5. This allows users to create some insanely detailed objects or environments and then import them into UE5.

Lumen is a way to have real-time global illumination that works in real-time. Change the location of the main light source and watch as the global illumination realistically mimics real world lighting.

Unreal Engine 5 - Lumen example
Unreal Engine 5 - Lumen example (top image: Nanite example)

Today's tech demonstration also includes current Unreal Engine systems such as Chaos physics, Niagara VFX, convolution reverb, and ambisonics rendering (fancy 3D audio). The video below is quite impressive to behold. Keep in mind that this is running on early PlayStation 5 hardware. You may skip ahead a minute if you just want the pretty visuals and don't want to hear people talking. Also included is a shorter video also showcasing some of the new technologies at work.