A new dynamic lighting system is to blame for Halo: Infinite's controversial graphics, but the fix may not come until sometime after the game launches in November.

Halo: Infinite was supposed to be the Xbox Series X's golden ticket to sales. The recent gameplay demo was hyped to no end, and everyone expected a next-gen spectacle. What viewers got instead was something that looked like a current-gen game, complete with unfinished-looking textures bereft of high-end detail. The reality is that the textures are indeed finished and rather high quality, but they were hidden in shadow and we couldn't really see them.
Infinite's dynamic lighting system, a new global illumination system built into the game's specially-designed Slipspace Engine, is the culprit. Dynamic lighting is great for reducing iteration time and reflecting/absorbing light in real-time, but it also creates environments where shadows can obscure models. That's what happened in the trailer, and why everything looked so wonky.
But there's a solution. 343 Industries can fix this with ray-traced global illumination, which would effectively trace the models with more lighting effects and ensure their gloss textures are always catching light. This would persistently illuminate the models and ensure high-end visuals are consistent throughout gameplay.
Luckily the developers plan to roll out a free ray tracing update on Xbox Series X and PC post-launch.

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We don't know exactly when that patch is coming--hopefully it's only days after release--but Halo: Infinite could look rather lackluster until it's out. Sadly Xbox One, Xbox One S, Xbox One X and non-RTX PC gamers won't be able to apply the ray tracing update.
At the same time, 343i and Microsoft both promise Halo: Infinite will launch as a next-gen visual spectacle on Xbox Series X.
So it's possible this update will be ready sooner than we expect.

We don't know exactly how 343i can shore up Halo: Infinite's lighting effects in 4 months without ray tracing. But it's not our job to know, nor are we privy to the tricks and optimizations that the team has access to. There's the new DirectX 12 Ultimate APIs and DirectStorage API for faster loading on both consoles and PC, and the Xbox Series X's enhanced Velocity Architecture to name a few. These are probably just a handful of new powerful tools that 343i is utilizing for Halo: Infinite.
Infinite's dynamic lighting system is made specifically for open-world gaming and to foster a more expansive experience, complete with day-to-night cycles. It also plays nicely with the FPS targets and allows 343i to hit perf targets on multiple platforms--including legacy Xbox Ones--while reducing iteration times associated with static lighting.
Maybe we'll get an update from 343i soon, but rest assured, Halo is one of Microsoft's most important properties and I doubt they'll release something that looks unfinished.
Halo: Infinite will release this November on Xbox One, Xbox Series X, and PC. It's also coming to Game Pass as a day-one release.