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Where did you read that it was "Bad engine, avoid", or "Unfinhed engine"?
Here, check this out http://devmaster.net/devdb/engines/unity#user-reviews
To whoever said the terrain looks bad without any shaders, well that's a given. Nowadays, a lot of games that try to achieve an AAA look depend a lot on shaders for graphics. Textures and models are only half of the solution.
And here is an example of what type of lighting Unity can do in highly capable hands.
