Ericmor is right. You can do all this, you can even do it in C++ with DirectX, in Ogre or Irrlicht. But then you need lots of programmers and dozens of years for programming missing features.
But all these features like AI, facial animation, physics and even middleware like SpeedTree is already integrated in the UDK:
http://udk.com/features.htmlThe downside of the UDK is that you need expensive modelling tools for all your artists involved in animation (Max, Maya or XSI, so only Autodesk products are supported).
But other tools can be used for static geometry.
So it is still quite expensive in the end.
If you miss the source code, then C4 is the better route, as I already mentioned. It has quite a lot of features but not as much as the UDK.
