Forza Motorsport 2: Physics and Frame Rate

This post is about something which I've been fascinated with for a few months now, starting way back at GDC this spring. Forza Motorsport 2 is set for release next week, which makes now a perfect time to discuss one of its awesome design elements. To my knowledge, Forza Motorsport 2 is the only racing game to feature such an advanced phsyics engine. Literally everything about a car is calculated and effects other parts and the car's performance. This includes calculations of heat, pressure, and friction. The developer behind the game is a Turn 10, a division of Microsoft Games Studios. They determined that in order to calculate so much phsyics information at once, the physics engine would have to run at far more than just 60 frames per second (fps). In fact, the physics is refreshed at 360 frames per second. This is separate from the game's fps, however, which is set to a smooth 60.So why is it important to have the game's physics engine update 360 times in a single second? Dan Greenwalt, the director of Forza Motorsport 2, presented the game back at GDC and videos of the presentation are available at GameTrailers. He discusses the physics in the video titled: GDC 07 Developer Walkthrough Pt. 3. The race track in the presentation in the Florida Sebring. The track was once an airport strip and then converted into a race track. The track is apparently very bumpy because of this, which makes it the perfect showcase for Forza's phsyics system. I have transcribed some of the presentation for you below:

Dan Greenwalt Game Director

We run our framerate at 60 frames per second, which is very important. Its very smooth. And it looks very nice but that has no effect on physics. What has an effect on physics is the physics update rate. We run our physics update rate as fast as 360 frames per second. Theres a reason for that. If you update at 60 frames per second and your going a hundred miles an hour you might clear 10 feet in the time between the physics updated. So phsyics updated, ten feet later, physics updates again. In ten feet you can go over all sorts of bumps and all sorts of crap on the road. And that's gonna cause instability in your car. So if you do run your phsyics that slow, you have to run all these buffers on your car to keep it from driving right, frankly. It makes the car kind of drive slow and lethargic and when you run into walls they dont spin they just kind of "dong." For us, thats not how we wanted the physics to be, and then once we jumped over that bridge and were like, ok, its 360 frames per second for the phsyics, this track was the obvious choice to show it off because there are so many bumps to get it right you have to run your update rate that fast.

I'll be honest, I think this is awesome. Turn 10 is devoted. Because the physics are updating so much faster than the frame rate, the game can keep track of every single tweak affecting your car. The near constant physics update allows the game to calculate and affect your vehicle in the most realistic manner possible. Now thats pretty sweet.
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How important do you think this phsyics to fps ratio is to the racing gameplay?