Why would anyone choose Lumberyard over CryEngine directly? I would think that ones core product will always be better maintained then just some side project that was bought in.
Cryengine is notoriously difficult to use. Crytek have also had severe financial difficulties. Amazon have their own team working on the source, I'm not sure how this has worked out but clearly amazon have plenty of resources to throw at it if they choose to.
The details are few and far between, but the possibility or being sued by the vendor would be a bit off putting for me.
> I remember reading about this and being left with the impression that [CIG] was in the green there.
If so, ISTR CIG is fine, but then they have a lot of money and fancy lawyers, a lot of smaller companies might have fared less well, and it doesn't really look good when a vendor is seen to be suing their customers because it is rumoured they are running out of money.
Would someone like Unreal have swallowed that from a client in order to avoid bad PR? Possibly. But if the allegations are true then I wouldn't go so far as to expect (in the moral sense) CryTek to let it slide.
CIG have moved to Lumberyard, a tech based on CryEngine, so lines of similar looking code are seemingly expected.
And the license was negotiated for a single game, not two as StarCitizen now is, but this would seem to be negated by the fact that these games are no-longer using CryEngine.
On the subject of CIG passing back engine improvements or not to CryEngine, I don't know.