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Object Physics vs Projectile Physics

I was looking at the first person shooter example, and I noticed the bullets use a projectile component and give it an initial speed rather than actual physics and setting it’s velocity when it spawns.

With this i also found the bullet behaves differently, in terms of trajectory and how it bounces.

My questions are, which one is more realistic, and which one is cheaper in terms of processing power (whether it does simpler collision detection or simpler simulation or both)

The projectile physics are much cheaper.
They use a simple tracing vs. actual physics, which also makes them easy to replicate.

If you intend to simulate some sort of projectile - i.e. bullets, grenades or rockets - then projectiles are good enough.