Well, I think Forza's method is about as good as it's going to get. You absolutely do want it to be close mic'd. What's more important, though, is where those mics are placed - ever tried recording an acoustic guitar?
If you read the article I linked to about Forza's sounds, you'll see they often have to resort to drastic measures to get the sounds they need, and there are usually several mics very close to different things making sound, with a few for overview of the middle-distance to make sure mixing is accurate.
I.e. put a microphone by the intake opening, put one by the wastegate / screamer pipe, one by the blow off valve, one above the valve cover or under the oil pan, one by the exhaust manifold, one in front of the radiator, one by the windscreen and finally one about three metres away for the full mix. Just for the "engine sound".
That way you can blend the individual recordings to match the distant recording or the close one (radiator, firewall) depending on what your needs are. With experience and practicality in mind, you could probably cut that number down significantly, but the idea would still be the same.
Why wouldn't you use the 3m recording directly? Colouration, from the environment reverb, and from background noise. You want your samples to be as clean as a whistle, ready to put your own localisation effects onto it depending on what's going on in the game.
This is brilliant proof of what I was talking about. They are all close mic'd recordings (one of them is a contact recording!) with excellent quality and not too much colouration (except in the cabin, where you want it, and the contact recording where it's band limited by the structure and the transducer). However, the engine noise is saturated with that ridiculously loud exhaust sound. I'm not sure that would be easy to fix, but it does reflect the cabin sound well enough; however, I wouldn't be so sure about the sound on the exterior.
They're missing a dedicated intake recording (probably hard to obtain) which will show up on any attempt at an exterior reproduction, but that doesn't seem to have been the aim of this video. The mix at the end takes a good deal of artistic licence and doesn't really represent the interior mix taken from behind the driver. Not that it matters, since you can't really use this for samples for a game - it's too transient. They'd serve as excellent reference recordings, though. I'm also really pleased at the vindication of an idea I had to record vibrations from the car's structure, and was even more pleased to hear the combustion pulses through that rollcage.
A final note: compare the high quality interior recording with that off the camera and remember the fan-made sound packs for certain games whose sounds clearly came from YouTube videos.
EDIT: It
seems this car has a particularly quiet intake / particularly loud exhaust.
EDIT: It also runs intake restrictors, which act as high-pass filters for sound, so the intake sound is now competing directly with that incredible exhaust noise.
