You can't make new character animations in UDK, or Unreal itself for that matter. You can do simple movements, like rotations and translations of objects, but that's it. Everything else would need to be done in a software supporting animation and capable of exporting into Unreal, the most likely candidate being Maya, since it has the better export tools for UDK. But given that they obviously haven't done so, you can assume that they have no animation experience, which explains why all the transitions look so damn sloppy. That would be because there obviously isn't any blending. From what I can tell of these videos, they didn't go through the process of creating animtrees in UDK, which actually blend animations, and instead are just playing them into the Matinee sequence, which is a sin upon sins. If you're going to port content because you're either 1) lazy or 2) inexperienced, then fine, but at least learn the tools you're using and put some effort into things. That is EXACTLY what they've done...when you create a cloth simulation, really only two things will make it move...either 1) another physics object collides with it, or 2) a "wind" effect. Since colliding with it would look goofy as hell, they've gone for the wind option, which I saw a few videos on their Facebook page, taking place on Bespin, where Kyle is still and it works OK, not great, but not terrible, the problem is that (in UDK at least) wind is kind-of set in single direction, and it's a volume, the only way I can think of to move it or affect it's direction at will, is through scripting, which it seems unlikely that they're doing much of for this, since literally everything they've done can be done with Matinee sequences. I think that warping effect is the "cloth simulation" they've been using to make it look like it is actually fabric, except they seem to have it constantly going, and it looks goofy, especially if you're on a space station or in a building. I wouldn't even go that far, these matinees scream of someone who picked up the software just for this purpose, and is learning by doing, the animation transitions are not smooth at all, and they don't seem to have a strong grasp on how to blend animations. Not a bad plan necessarily to learn by doing, but for something this large (be it using ported content or not) it's a poor decision. The Matinee editor is stupid easy to learn, you're basically just dropping in animations and sounds, etc like you would video clips into a video editor.