I'm confused as to why people are describing Apache and BSD licenses as
"permissive". Really think about what that's supposed to describe. I think
the word "permissive" is the wrong word to use. It gives the wrong idea of
what the license is for. The GPL is far more permissive than those licenses
are.
You are right though, the game engine could be dual licensed. I think the
biggest problems the surround game consoles is that they subjugate the user
more than non-free software does by itself. Not only are you running non-free
software on the system, but you're not permitted to make the system do
anything else. You're also not permitted to develop anything for the system
unless you pay a ransom. Pay the ransom and you're "permitted" to create a
game. That's only half the problem because publishing is still an issue for
you. Not to mention that if you're trying to make money it would make sense
to be on all the console if you can afford it. Since many can't then you've
got to gamble with one. This does split the user base and it gives the
hardware makers a huge monopoly.
I used to be a huge fan of Nintendo. I still think they make some of the most
brilliant games but that is a separate issue from software freedom. If I
modify my Wii I could risk having it get ruined by an "update" from Nintendo.
I also have no option to publish a game for it because the cost is so high.
Not to mention that the tools needed to develop a competitive title are
non-free. I own a huge collection of console games but have made the decision
not to buy any more. I will occasionally buy a really really cheap($3-4) used
game, but that doesn't support the companies producing these games.
Looking forward things are only getting worse as companies are trying to do
away with physical media and even limit how physical media can be used. I
don't doubt at all that Sony would limit a disc to work in just a couple of
consoles and otherwise render it useless.