REDengine 3
Creating game engines is an expensive business, and in the past few years we've seen the majority of developers gravitate towards ready-made solutions like CryEngine and Unreal Engine that are constantly upgraded and backed by dedicated support staff. Given the number of models, textures, audio files, and other assets in The Witcher 3: Wild Hunt, you might expect CD Projekt RED to follow this trend to cut costs and ease the development of a gigantic open world game. But no, CD Projekt RED has opted to instead upgrade The Witcher 2: Assassins of Kings Enhanced Edition's REDengine 2, which was itself an upgrade of The Witcher 2: Assassins of Kings's REDengine 1.
The biggest challenge in this upgrade process was the implementation of a streaming load system, enabling the developers to switch from smaller environments with frequent loading screens ,to big open worlds that load silently in the background during gameplay. This is no easy feat, and has taken established engines some time to fully implement and perfect, but here in The Witcher 3: Wild Hunt CD Projekt RED has created a fully functioning, near-flawless system on their first attempt.
Similarly, just about every other system has been upgraded for meet modern-day standards, ensuring the appearance of detailed environments (in the context of an open world game). Physically-based rendering, high-precision effects and DirectX 11 tessellation are all to be found within the updated engine, along with other expected mod cons.