At the recent GDC in London, Allegorithmic showcased their new technology, which they claim will reduce texture file sizes in games by up to 70%.
Allegorithmic, a company focused on developing technology for graphic artists, is confident that its new ProFX tech will be adopted by the entire gaming industry. And it's easy to see why they might think that.
Textures have, historically, been the most space-consuming part of games, and with digital distribution making file size an issue once again, many companies are looking for any way to make their game smaller. File size is even becoming an issue for console manufacturers, with Sony claiming that the higher storage capacity of their BluRay discs gives developers more freedom. Allegorithmic might argue that developers don't necessarily need all that new room.
As can be seen here, ProFX essentially works by making a procedural "description" of an artist-created bitmap image. This description can be as small as a "few kilobytes," yet describe an immensely detailed texture. ProFX then allows the game engine to decode this description, making the small file back into the high-resolution texture file. When combined with the game engine's shader system, these compressed textures appear as detailed as full-sized texture files.
An example of ProFX in action can be seen in the upcoming XBox Live Arcade game RoboBlitz. RoboBlitz uses the Unreal 3 engine, yet still manages to clock in below the XBLA maximum total size of fifty megabytes. In fact, through the use of the ProFX technology, the entire texture library for the game is smaller than 300 kilobytes.