I've figured out how to add an alpha effect to your hardware skinning shader. It involves using a diffuse texture with an alpha map Ii tested it out with a .png file) and changing the final line of your animated animatedNormalSpecular.hlsl file from:
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psOutStruct.color0.a = 1.0f;
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psOutStruct.color0.a = tex2D (base_map, psInStruct.uv.yx).a;
-h