I doubt it's that big a deal for Epic, Laa-Yosh. If I were to rank where UE3 was being used it'd be 360, then Windows, then PS3 (then Wii if that rumour proved true?). Surely tying up Epic for Windows and Xbox exclusivity would be a very big win for MS. Epic in their golden days were fantastic, and Gears was a silver bullet for MS in 2006. Remember, MS's real market is the PC, with the 360 being a smaller fish. Devs like Epic drive the PC industry through pushing hardcore technology which drives the CPU and GPU upgrade market... and when upgrading, people will be moving to Vista and future iterations of Windows.
That said, I agree it's likely to be false given Bizarre, Bungie and Bioware's movements over the last few months.