Definitely, that's how Skyhook is done.
Just make your structure/floor/whatever in 3dsMax/Maya/whatever and place it as a static mesh, give it collision... maybe some special lightmaps and stuff... annnd you got a level.
None of that Halo closed world bullcrap... if you see out to infinity the only downside is a hall of mirrors effect. Whoopdie-do.
Think about it? What's a level but just a bunch of static objects to stand on... and something to see in every direction?
Some smart things to do however: Make your static meshes in pieces and place those pieces in the editor... it imports better, takes like 20 minutes, and REALLY speeds up rendering (since you don't need to portal/antiportal in Unreal Engine 3) and make the things you can't touch non-collision... so you don't need to calculate physics on it all the damn time.
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