Is unreal engine even a good choice for turn based RPGs? Isn't a custom engine alike the one currently used more adapted to those specific needs?
It depends what functionality it has out of the box. Traditionally Unreal is being used for First Person Games, and from what I understand that is what it is best geared for. Firaxis created both XCOM1&2 using Unreal, so it is possible, but according to Jake S. they did a lot of work to make it happen. That was a reason why they didn't update to newer version of Unreal for XCOM2 and decided to build on what they already made for XCOM1.
One can always run into the
problems Bioware had with Frostbite - where allegedly a lot of fundamental functionality needed for their title just wasn't there.
