The shift to PhysX happened when Intel bought Havok and basically took it off market. The fact Unreal uses it by default means any game running Unreal will use PhysX as well. Havok is gonna have a tough time returning, especially if NVIDIA would finally open it up for hardware acceleration for other vendors (making it Direct Compute based instead of CUDA). That could again make it a tough competition for Havok. I frankly don't care if it's Havok or PhysX, for as long as both, AMD and NVIDIA gamers can experience the same level of physics details. When that happens, the interactivity in games will explode beyond anything we've imagined so far. Physical manipulation of the worlds will become an integral part of gameplay, meaning we'll be able to finally see some proper game puzzles and ways to defeat enemies using environment and objects in it. Imagine Deus Ex that already offers loads of ways to finish a task, adding a physics layer to that. Or in Hitman games where we'll finally truly be able to make executions in most creative ways. It's gonna be maaaaad when that happens. Soon I hope...
havok is still the best third party physic engine available to game developer despite nvidia PhysX increasing popularity over the years. but PhysX 3 is actually quite good. very good that many games that use nvidia PhysX actually decided not to use the GPU acceleration because some of the effect can be run of completely on CPU as long as it is not excessive.