Up until now, NVIDIA's PhysX technology hasn't been used in games all that well. Even today, it's still just a technology demo, and a technology acquisition by NVIDIA, but they continue to keep their heads down and work on the physics technology.
There's a new simulation using PhysX, which you can check out in the above video. The demo is the result of research by Miles Macklin and Matthias Muller. They have a paper published about it, which you can read here, with some details below:
In ﬂuid simulation, enforcing incompressibility is crucial for realism; it is also computationally expensive. Recent work has improved efﬁciency, but still requires time-steps that are impractical real-time applications. In this work we present an iterative density solver integrated into the Position Based Dynamics framework (PBD). By formulating and solving a set of positional constraints that enforce constant density, our method allows similar incompressibility and convergence to modern smoothed particle hydrodynamic (SPH) solvers, but inherits the stability of the geometric, position based dynamics method, allowing large time steps suitable for real-time applications. We incorporate an artificial pressure term that improves particle distribution, creates surface tension, and lowers the neighborhood requirements of traditional SPH. Finally, we address the issue of energy loss by applying vorticity confinement as a velocity post process.
It looks great, but I don't think we'll see fluid physics like that in games for a very long time.
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