as far as i know using several huge screen-filling transparent entities which are behind each other is slow with all engines (or with realtime 3d graphics in general). i am not sure but i think this has something to do with pixel fill rate and overdraw rate or something like that...
1024x768 * 5 spheres * 50 fps =~ 200.000.000 pixels per second only for your spheres. does anybody know the max fillrate of current graphic cards or of the radeon 64?
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I've been watching other games, paying atention to grass. Why the major part avoid alpha transparency and use indexed? Just because of the extra channel? If it was only it, I still think it is worth the extra channel because it can even make up for the memory against the need of a higher resolution sprite.
sprites or model entities with alpha channel can't use the z-buffer and have to be depth sorted which takes a lot of performance especially with huge numbers of entities...