San Francisco-based Caustic Graphics has developed a new patent pending technology that can actually bring ray-tracing that generates highly realistic accurate three-dimensional images to computer gaming. Ray-tracing is currently really only used in high budget Hollywood productions and is a rather tedious process where a short scene can take months to generate with ray-tracing.

Caustic says it has developed software and a physical chip that has the capacity to generate ray-tracing images 200 times faster than even the highest end video chip currently available. Users would have to actually use the Caustic chip on top of their existing video card. Caustic is aiming to release its CausticOne chips by mid 2010. There is no information relating to pricing, or possible partners for usage or distribution.

If the process does prove to work quickly and in a cost effective way, we may begin to see highly realistic video game titles in the next few years, and could even see the CausticOne chip used on a major gaming console.

Caustic faces many challenges, including intensifying competition from competing retail graphics firms developing similar ray-tracing technology, such as Mental Images, recently acquired in December 2007 by video chipmaker Nvidia.

Caustic has been founded by former Apple technology and graphics designer James McCombe, 26, among other former Apple engineers. The company currently employees 35 people and has raised $11 million to date in VC funding.