Following the Game Awards announcement of an Ōkami sequel, speculation immediately arose regarding its game engine. IGN exclusively confirms that Capcom's proprietary RE Engine will power the game, based on interviews with key project leads.

Machine Head Works producer Kiyohiko Sakata confirmed the use of RE Engine, explaining their role as a bridge between Capcom (IP holder and director of the game's overall vision) and Clover (lead developer). Machine Head Works' experience with Capcom, previous work with director Hideki Kamiya, and familiarity with RE Engine are key assets, particularly given Clover's lack of experience with the engine. Furthermore, Machine Head Works also includes personnel who worked on the original Ōkami.

Capcom producer Yoshiaki Hirabayashi succinctly stated that RE Engine's capabilities are crucial to realizing Kamiya's artistic vision, emphasizing the engine's expressive capabilities and the high expectations surrounding its use. Kamiya himself added that RE Engine is known for showcasing the best in game visuals, and that this level of quality is expected for the Ōkami sequel.

Sakata further hinted that RE Engine might allow the team to achieve elements previously unattainable in the original Ōkami, leveraging modern technology to surpass past limitations.

RE Engine, initially developed for Resident Evil 7, has powered numerous Capcom titles, including the Resident Evil series, Monster Hunter, Street Fighter, and Dragon's Dogma. While typically associated with realistic graphics, its application to Ōkami's distinct art style presents exciting possibilities. The upcoming REX engine, a successor to RE Engine, is gradually being integrated, potentially influencing aspects of the Ōkami sequel.

A complete Q&A with the Ōkami sequel's development leads is available for further details.