There’s an interesting technique that’s been used in demoscene and Shadertoy projects for a while, and an analogue of which recently made it into Unreal Engine 4: using signed-distance fields and raymarching to produce high-quality soft shadows with accurate penumbras.
There’s a good writeup of the idea, with some visual examples, by Íñigo Quílez here—I’m not sure whether he invented the technique or was just one of the first to write about it:
The trick is to think what happens when a shadow ray doesn't hit any object, but was just pretty close to do so. Then, perhaps, you want to put that point you are shading under penumbra. Probably, the closest your point was to hit an object, the darker you want to make it. Also, the closest this happened from the point you are shading, the darker too. Well, it happens that as we raymarched our shadow ray, both these distances were available to us! … So, we can simply compute a penumbra factor for every step point in our marching process and take the darkest of all penumbras.
The documentation on the corresponding Unreal feature is here; their description of the technique is a little vaguer, but still helpful.
To calculate shadowing, a ray is traced from the point being shaded through the scene's Signed Distance Fields (SDF) toward each light. The closest distance to an occluding object is used to approximate a cone trace for about the same cost as the ray trace. It allows for high-quality area shadowing from spherical light source shapes.
The main advantage of this approach is its high visual quality—most other techniques don’t handle varying penumbras well, and it doesn’t suffer as much from the aliasing problems of shadow maps. The main disadvantage is needing a distance-field representation of your scene geometry to trace rays through; unless you built it that way in the first place (there’s a fascinating talk about how the team behind “Dreams” did exactly that), you’ll need a way to construct the SDFs out of your mesh geometry, which is an expensive and sometimes error-prone operation.
UE4 handles the SDF generation by building them offline beforehand and then stamping them into a volume around the camera at runtime (more information on that here), but it’s not a cheap process so UE’s approach is only viable on high-end hardware for now. That said, if you do already have your scene geometry in SDF form, it’s quite easy to implement—see this Shadertoy for an example.
