$blendtintbybasealpha
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$blendtintbybasealpha is a VMT parameter that allows tinting of a mesh's material using the $basetexture's Alpha Channel as a mask to determine tint intensity (but not the tint's RGB color!) Applying an actual color RGB values is done elsewhere - either in-game or in Hammer with entities using the 'fxcolor' keyvalue. This technique is used in games like Left 4 Dead 2 to allow for recoloring of the vehicle props, and in Team Fortress 2 for painting hats.
The tint mask simply controls the intensity of tint. Brighter pixels apply more tint while darker pixels apply no tinting whatsoever.
$blendtintcoloroverbase, a related parameter, controls the amount of color replacement versus tinting. (Confirm this!)