I can run Palmbay in medium setting on a real low end maschine here (formerly high end in 2004, current consumer grade Nvidia) without any "jerks". I can even run it in high settings albeit it is bleeding FPS then on a veteran like mine, but still giving better performance than F.E.A.R. which is very old.

High end commercial tools like the current Cry Engine are free* - and not. First, to ride a beast like that you need a lot of manpower. Than you need a week of training in the US with your staff "to get the project on the right track". They don't require it, but I have seen that thing** and IMHO you better get that training. And the second training in Frankfurt wouldn't hurt, too. I will not start with the ton of expensive third party tools you gonna need.

3DGS is NOT that league. It is a small-wolfpack-indie-development-System.

You simply don't make Triple A games without the talents for hire and the bucks to pay them. That does NOT solely depend on the engine.

Besides, Palmbay in High setting looks pretty decent and is far from "horrible". Therefore, to understand your judgement, I'd like to see some of what you would call "good graphic"

Edit:

*At least for non-commercial use. For commercial uses you have to pay a nifty 20% of your net, and for access to the source code you pay, ahm, you PAY.

**"That beast" may be misunderstood. I have had a good look at the CryEngine 2 and I don't think it has gotten less complicated and obscure.