Whether or not the CryEngine is being used in Star Citizen is the focal point of a recent lawsuit between Crytek and the game's developers. Based on recent reports, there's a heck of a ball of yarn to unravel here.
When it comes to licensing a game engine, the terms are usually pretty black and white. If you use the engine, you must pay for it and clearly state that you are using said engine. According to Crytek, that's not the case with the makers of Star Citizen, specifically Cloud Imperium Games and Roberts Space Industries.
Star Citizen is one of those early crowdfunding success stories that seemed to balloon out of control. It made a boatload of money and, as a result, the scope of the game grew and grew. It's been in development for about five years now and, in that time, has basically broken into two companion games.
About a year ago, Cloud Imperium Games and Roberts Space Industries announced Star Citizen would no longer be using the CryEngine, moving instead to Amazon's Lumberyard. As Polygon points out, this adds an extra wrinkle to the case, as Lumberyard is actually a sort of spinoff from the CryEngine that was purchased by Amazon.
The key points Crytek is making, though, are that despite all of that, Star Citizen is continuing to use CryEngine despite claims to the contrary. In short, they're accusing the developers of using (at least in part) an engine they're no longer licensing and, if that's the case, not including the CryEngine logo in the game's promotional material.
As if this wasn't complicated enough, as noted above, Star Citizen is no longer a single game. The team is also making Squadron 42, which is supposedly a sing-player action romp set in the same universe and built on the same engine. In other words, there are potentially two games being targeted by Crytek's lawsuit, both of which are super behind schedule for launch based on original timelines established by the crowdfunding campaign.
According to the original report, both parties have made statements that can basically be boiled down to Crytek saying, "Dude, they're still using our stuff and not paying for it," and the accused parties saying, "Nah, dude, we're totally not."
With neither party offering an inch here, it's likely this suit will be progressing in the near future. We figure it will be up to the developers to prove they are not using a scrap of CryEngine code in their games, which might be a bit tricky to pull off. These are two massive games, remember, and the engine supposedly being used is, itself, derived from the engine Crytek is suing over.
If a jury sides in favor of Crytek, we figure it'll result in a boatload of damages being paid out and possibly a thorough code comb to make sure all things CryEngine have been completely removed. Or, maybe they'll just license CryEngine again. It's impossible to guess at this point. The only thing we know for sure is that this does not bode well for either game coming out anytime soon.