No, CryEngine is NOT in the making. Three is still being developed (for Crysis 3 OFC)
Unreal Engine of COOOURSE will be on Consoles, now the thing is... it'll be dumbed down for the consoles. Have you seen the pics or that YouTube video of UnrealEngine4? God, amazing.
A console will ONLY be capable of running those kinds of textures if the unit itself cost a bulky 600-800$. I actually wouldn't dought that might just be the price...
But yea, there is much flames and interest in the Unreal Engine, epic REALLY did it this time... amazing, could re-define gaming.