The early days of 3D acceleration were a confusing time. Rather than the simpler world of today, back then we had PowerVR, Glide, OpenGL, and a number of less-popular APIs. Microsoft finally grabbed the reins and stepped in with Direct3D/DirectX, fixing the convoluted mess. OpenGL and Direct3D are now the standard, with Direct3D enjoying a much wider adoption.
These early days of physics acceleration are entirely reminiscent of the beginnings of 3D acceleration, and Microsoft is once again stepping in to sort out the mess that is starting to develop. We, of course, have AGEIA and their PhysX API, we have NVIDIA/Havok in bed with each other, and even ATI is brewing something up. It's getting ugly before it even starts. The consumers don't want another format/API war, and Microsoft knows that.
There are no concrete details as of yet, but we can probably expect Microsoft's physics SDK to become a part of DirectX 10 late in the game, though most likely it will be a standard feature of DirectX 11. The Inquirer says that this is as good a sign as any of market validation of the physics accelerator concept. [neoseeker]
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