Unreal Engine 4 was first shown behind closed doors at GDC 2012, and the first images of that private demonstration are now making the rounds. The full demonstration is planned to be shown the the public during E3 this year. The entire demo is supposedly run on a single Nvidia Kepler GTX 680 graphics card, and will likely blow gamers' minds when a game is finally built on it.
Naturally, it's difficult to recognize the breadth of improvements from a small number of medium quality images, but if anything they help build anticipation. The demo features an armored demon, awaking from a crypt within a bursting volcano, and has a focus on particle effects and lighting. Those are notable tech improvements however, as it's obvious Epic has improved upon their engine in all regards.
Here's Epic's Tim Sweeny weighing in on what he wants to show with the Unreal Engine 4 demo:
"We used it as an opportunity to make a point to the developers. We want 10 times more power; here's what we can do with it."
Unreal Engine 3 screenshots were first shown in 2004, and the first game (Gears of War) released on the engine came out in 2006. Just speculation here, but hopefully we'll see the first Unreal Engine 4 game within two years. Until then, we'll have to settle for these screenshots and hopefully the full demo at E3.
Thanks to tekmosis for the tip!