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I don't see animation as an issue, I would say the issue is movement in general, if you can do movement then you can do animation. Are their algorithms as efficient when stuff is changing position and orientation? almost certainly not.
I don't see collision detection being an issue, the collision/physics engines keep very simple versions of objects and it would be exactly the same here, a box with 10,000,000,000 voxels is still represented as a simple box with 8 points in the collision simulation.
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Movement is not as complex as animation. Take your body, even just 1 part of your body, your arm as a voxel model. Now, it can move on XYZ quite easily - now how does it bend? - well probably has to work just like skeleton animation. Each vertex or voxel would have to move according to the bones in the arm, a bone at the elbow would have 2 bones to worry about. But usually this is done with a couple of thousand polygons, not a couple of hundred thousand... which would be the case with a voxel model. And this doesn't even take into account the fact that the graphics card tends to handle animation these days.
As for collision, well for movement collision they could use a low poly version, just like they do already with traditional games. But what about accurate collision? - what about bullet collision, and the sort of collision response needed for a physics engine. It's one thing to take a screen pixel with precalculated normal and work out what to render - raytrace systems have done that for decades - but it's another matter altogether to search all that data and check for collision, with no handy screen index.
Mostly though - did you see how nervous the developer got when it looked like the interviewer was gonna collide with the elephant. No collision detection in the demo, no animation, and the fact that we haven't seen either of these in a new demo, well I think we can safely say they are posing more of a challenge than they thought they would.
I also noticed that they haven't shown any tilting - I wonder if tilting is a problem for the render system.
We don't know for sure, because these guys won't release any more details in case someone pokes a hole in their whole system, and that would affect funding. Sorry but I just don't trust these guys, we should trust our gut feeling, even if it is pure scepticism.
I got a fever, and the only prescription, is more memes.
