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Hey, Jonathan here :)
I used Game Maker Studio for Shell Shift. I learned a lot about Shaders while working on Shell Shift, a lot of visual effects use simple pixel shaders, for example the reflections, rain, corpses or character lights.
The artists used various programs to create the assets we needed and the music was done by Cyrano using Ableton I think.
The biggest challenge for art and programming was probably the perspective that brought a lot of problems.
We had about 2 months for the development.