Hey,
I wondered myself how games manage it to change the character’s look (e.g. in cinematics). After the fight the character wears holey cloths and got scars on his body. Do you really have to change all the materials(fabrics normal,roughness etc. ;skin normal,roughness etc.)? Because I guess it is not possible to manage it with decals. If you have to change all the material in the cinematic, can someone please show/tell how it is done?
Thanks in advance.
You can easily do this with parameters in your material -> you can make scratches visible, you can swap a texture, you can add other textures with a mask,… 
This video shows you the basics (how you can access a material parameter from your blueprint):
Here you can see how to blend a texture: (e.g connect a scalar param to the lerp nodes alpha and then you can change it -> blends from one texture to another)
Also make sure to take a look at the material doc: https://docs.unrealengine/latest/INT/Engine/Rendering/Materials/index.html