@remozseo I know people come from different background (industries) and sometimes it might get some confusion regarding terms in use. I do my best to keep their use correct and sometimes it takes more words to explain things, since we are not able to just show in the form of how-to. Lets go:
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regarding the “need of Baking” -> The term is sometimes used to just tell the process of rendering a scene snapshot. In a gamedev scenario it is used to build static shadows from static and stationary lights, which in the end will “bake” or produce textures to represent those shadows and also reflections. In realtime raytracing consider it as just the whole process to produce the scene snapshot like in VRay or Arnold.
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regarding the “need of unwrap everything” -> There is two different process involved in mesh creation after you model them. One is important and it is called Texture UV Unwrap, and it tells the engine and the renderer how the texture is layed out on top of the mesh. It helps to avoid texture stretching when you have a complex shape for the mesh and too many textures applied on its surface. The better you do the job, the better the result will end up on the final appearance, avoid seems to be shown etc. The other important thing, only useful for gaming workflows (for the optimizations purpose I mentioned in my post above) is the Lightmap UV Unwrap, which sometimes is just a copy of the Texture UV Unwrap which the engine can do by itself, but won’t work for all cases. The Lightmap UV Unwrap is not necessary for Raytracing, since this one just cares about the geometries and materials in the scene.
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regarding the “engine still require uvw’s for every single object” -> If it is for the Texture layout, then the answer is yes, even when using Raytracing. If it is for Lightmap layout, then the answer is yes, if the purpose is gaming, otherwise is no if Raytracing.
Dealing with Texture and Lightmap UV Unwrap process is not complicated for simple shapes, but things like characters, machinery, then the effort can become quite daunting. Luckily there are tools which simplify the process, others are still experimental and I know some people using this: (check the videos)
twitch.tv videos and/or