Following the sequel announcement at The Game Awards, speculation immediately arose regarding the game engine powering the new Ōkami. IGN can exclusively confirm that Capcom's RE Engine will be used, based on interviews with key project leads.

In an extensive interview, Machine Head Works producer Kiyohiko Sakata confirmed RE Engine's use. Describing Machine Head Works' role, Sakata stated they act as a bridge between Capcom (IP holder and directional lead) and Clover (development lead). Machine Head Works' prior experience with Capcom and director Hideki Kamiya, coupled with their familiarity with RE Engine, provides crucial support to Clover, who lacked prior experience with the engine. Additionally, Machine Head Works has personnel with experience on the original Ōkami, further assisting development.

When asked about RE Engine's appeal, Capcom producer Yoshiaki Hirabayashi succinctly replied, "Yes," elaborating that Capcom believes Kamiya's artistic vision couldn't be realized without it. Kamiya added that RE Engine's renowned expressive capabilities are expected by fans.

Sakata further hinted that RE Engine might allow the team to achieve goals unattainable with the original Ōkami's technology, stating that current technology, coupled with RE Engine, allows them to surpass their previous ambitions.

RE Engine, Capcom's proprietary engine (originally developed for Resident Evil 7: Biohazard), powers many of their major titles, including the Resident Evil series, Monster Hunter, Street Fighter, and Dragon's Dogma. While most RE Engine games feature a realistic art style, the application to Ōkami's distinct aesthetic is intriguing. Capcom's development of the REX engine, with gradual integration into RE Engine, may also influence the Ōkami sequel.

A full Q&A with the Ōkami sequel leads is available for further details.