Oculus Rift CV1 impressions from a DK1/2 user...

It's optical - not software. If you take the lenses out, you wouldn't see any godrays. It's also present in the Vive, and is an artifact of fresnels, so both devices are likely stuck with it. You can reduce it by changing the background light levels, but for something in space (where you sort of need it to be black with high contrast on lit areas, or a loading screen with a black background), you're sort of stuffed. Unless you want grey space.....

What's interesting for me is that the Rift went through the DK1 and DK2 without the fresnel design - I wonder why they went for that in the end as the DK2 was (and still is) a pretty good experience.

I get god rays in my DK2 with project cars.
 
Although ask any DK2/Rift owner and they'll tell you they'd take chromatic aberration over smearing any day!

The smearing must be really bad then. I've got a DK2, and the CA annoys me to no end, as any off center stuff looks like crap with visible misalignment. I've also got a Vive, and while a bit annoying, the reflections off the Fresnel lenses (smearing?) doesn't bother me as much.
 
Although ask any DK2/Rift owner and they'll tell you they'd take chromatic aberration over smearing any day!

No, I hated CA - it made nearly every scene flawed whereas the smear only makes some (or at least a lot less) scenes look bad. IMHO smear at it's worst is worse than CA but with experiences designed around the current flaw in VR it's less of an issue than CA overall. However space games, and we are in a space game forum here, will often show off this worse side. It all goes to show there is a lot of work still to do on VR.
 
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