laeus
The latest Unreal is a wonderful piece of engine software. Their blueprint system as well as their material editor and best-in-class renderer really are something to talk about. They also have a gigantic learning community. And I think their licensing terms are a good approach.
However, Unity has blazing fast compilation time on the order of seconds, a properly built play-in-editor mode, large asset and plugin ecosystem, seamless asset pipeline, and support for a modern programming language in C#. Each of these could arguably be considered a game changer in isolation, but in aggregate they are an efficiency avalanche. Nothing makes a better game, faster, than being able to go from idea to prototype in five minutes rather than two hours. It's possible to try more things, to discard ten or even fifty bad ideas for every good one, and still come out ahead. This is what it all comes down to, in my experience. And when you're done, you can port your game to over a dozen platforms (in some edge cases by simply changing a dropdown value).
That said, I'm happy that both engines are so good, because it means neither will rest on its laurels. Unreal's marketplace and Unity 5's renderer are no accidents.
A trial process like this would select against lots of quality developers, true, but that isn't the real question. Instead, I want to know whether the developers who wind up being hired represent a more talented subset. I can't prove that it would, but I feel that this system would be more accurate in letting the right people through.
All that said, I like some of the gray area solutions proposed in this HN thread, including after-hours or weekend remote work on a project already in production. Not a perfect solution, given the inability to evaluate things like culture fit, but it combines many upsides of the alternatives.
I can see lots of reasons to develop a game engine from scratch, but they become less compelling every year.
Note that I actually fit into the article's title as a 35 year old guy who doesn't plan on having kids. I will often spend a few extra hours polishing something up because I relish the end result and because it energizes me to come in to work every day. Sure, I could make "double the money for half the work" in some other industry, but I love making games and can't imagine sacrificing my passion to make some equation look better on paper. But I never pressure others to stay late, and from what I'm seeing these days, more and more studios are converting to a reasonable outlook on developer productivity and happiness.
I look forward to seeing this link pop up again in a few years. :)