As games steadily approach new levels of photorealism, one of the few remaining "problem areas" has been providing a realistic simulation of water physics, which is still notoriously difficult to implement properly, and is compute / graphics intensive.
A new fluid simulation algorithm (FSA) from PhysX appears to have made a breakthrough with its Position Based Fluids (PBF) technique that is based on the same Position Based Dynamics (PBD) framework used for simulating cloth and deformables in the PhysX SDK.
According to PhysX Info, PBD uses an "iterative solver" that allows it to "maintain incompressibility more efficiently than traditional SPH fluid solvers. It also has an artificial pressure term which improves particle distribution and creates nice surface tension-like effects (note the filaments in the splashes). Finally, vorticity confinement is used to allow the user to inject energy back to the fluid."
Further information on the technology is available in the following SIGGRAPH 2013 paper by Miles Macklin and Matthias Mueller-Fischer. The demonstration video (running on a single GTX 580) is available below.
