I suspect this is the nail in CryEngine's coffin.
I massively disagree with the decision, though. I think CIG could have taken CryEngine under their wing and continued developing it, releasing StarEngine (their fork) as another competitor on a field which simply doesn't have enough high quality competition as it is. Maybe they thought about it; maybe they couldn't get the rights, or didn't have enough cash for it. Maybe Amazon made them a massive offer just for the name recognition, too.