Despite it having a mini-Final Fantasy story all its own, Agni's Philosophy's true purpose is to show off all the different things this engine is capable of doing. The tech demo opens to a truck driving past two hairy animals. This is nothing special until you realize that not only is every individual hair on their bodies being rendered in real-time but also the hairs are moving in accordance with the wind and movement of the animal. More than that, you can see the animal's refection in a pool of water—an image that is a real-time copy of what the animal is doing—that is distorted due to the depth and clarity as well as the movement of the water. But what's truly amazing about this is not only that it is being rendered in this way but also that it can be changed drastically with a click of the mouse.
Let's take the old man in the next scene for example. Nearly everything about him can be changed on-the-fly by moving any of a set of slider bars: his skin color, the amount he is sweating, the brightness of the sun upon him. But his hair—specifically his beard—is astonishing in and of itself. Its thickness, the way it clumps, its length, its stiffness, its color, its elasticity, even how curly it is can all be changed on-the-fly. The hair is also capable of interacting with other objects automatically as well. At one point, this scene was paused and we were shown a floating white ball moving through the beard with the hair reacting realistically with no extra input needed.
In the next scene inside the temple, particles are the name of the game. From the start of the scene there are thousands of red and yellow glowing insects flying around. Soon they are joined by blood particles and chunks of flesh as the summoned dragon begins to form. Every single one of these particles—insects, blood, flesh, and even smoke particles from the numerous candles—is individually rendered. Their size, color, opacity, thickness, and even their individual movements can all be changed again with a simple set of slider bars. Like the hair, these particles also respond automatically to the objects they interact with—both solid objects and other particles.
Later, as Agni is attempting to escape with the crystal, we see her grab a glass bottle, make it glow with magic, and dump it on her arm to heal her wounds. Believe it or not, the most amazing thing in this scene is the glass bottle. The magic light passes through the bottle exactly as a bottle of that size and thickness would in the real world—they even showed us the calculus formula to prove it. Again, nearly everything about the bottle can be changed on the fly: its thickness, the dirtiness of the glass, even odd textures in the glass. But this is not the only time light comes into play.
Realistic lighting is one of the key players in the aptly named Luminous Engine. Great care has been put into having it affect all the objects you see in the tech demo, from water, to glass, to human skin and hair. But perhaps the most interesting lighting effect has to do with the eyes of the characters. The eyes themselves in Agni's Philosophy are all structured like real human eyes, complete with a lens. From that, the engine is able to automatically (and correctly) put the reflection of what the character is seeing onto its eye. Of course, reflections don't appear only on eyes, but rather on all even slightly reflective surfaces in the demo.
The Luminous Engine is simply an amazing piece of technology. The way it handles light, particles, skin, and hair is nothing short of astounding. Frankly, when you get down to the details, it looks better than any other real-time engine I have ever seen.
Simply put, the Luminous Engine is Square Enix's attempt to show that they can not only make a world that looks and acts exactly like the real world, but that they can also do it in real time. But more than that, it's Square Enix showing that they are already prepared for the next generation of consoles—that they have already worked through and conquered all the problems that other developers will face over the next coming years. And that's the reason this conference was open to the public and streamed online: they want you, the common gamer, to know that they are ready.
But while Square Enix spent a lot of time at the conference detailing how to work with the engine for the best results, it remains to be seen if making a game with the level of detail present in Agni's Philosophy is even practical. Regardless, one thing is for sure: the next generation of games will have the potential to look far better than anything we have seen yet.