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I dunno, our systems analysis and design tutor always told us the client doesn't know what they want! Or that might've been web design. Either way!![]()
Realism wasn't the issue with those cloth effects (which were very nicely done in splinter cell - and it was quite an old version of splinter cell) the problem was you could only use a very limited number of those affects active in any one scene before performance plummeted from nice and smooth to single digit framerates. With hardware physics you can have say 20 of those effects running in a single scene and it will still be giving you smooth framerates.
I can see where you are coming from in terms of having a 'one size fits all' solution and the benefits that would bring. However I think part of the problem is that humans have so much inbred expectation of how certain types of object will/should behave that in some cases it's probably just as well they have 'bespoke' physics applied to them, rather than some crude, half-hearted generic system. For example ripple effects on water, I imagine that's probably fairly hard to accurately simulate, and that a 'hardcoded' ripple effect triggered under certain circumstances probably actually looks a lot better than most attempts at doing it 'properly'.
Obviously the more objects you decide you want to have physics applied to, then the greater the argument for a universal system becomes. I just don't think we've reached the point in gaming development yet where there is enough weight behind that type of requirement.