Game physics is definitely the focus of the graphics and gaming industry. All that tremendous processing power in current GPUs is just begging for a compute-intensive application and game physics fit the bill perfectly. For gamers, better game physics mean a more immersive environment and a more enjoyable game play. For the industry, it will drive the demand for better and faster graphics cards.
Until recently, it was not possible for the gaming industry to include much game physics even with the advent of the Havok and PhysX physics engines. This was because the calculations had to be executed by the processor. The introduction of a Physics Processing Unit, the PhysX P1, by AGEIA improved the situation by delivering hardware-accelerated physics. However, the gaming industry was understandably hesitant about spending expensive development time into game physics just for the small number of PhysX P1 users.
It took NVIDIA's purchase of AGEIA to truly bring hardware acceleration of physics into mainstream use. Almost instantly, all NVIDIA graphics cards from their GeForce 8 series onwards were able to offload PhysX calculations from the CPU to the GPU. This not only improved performance, it also encouraged the industry to add more game physics into their games.
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