I have some questions about building level from modules. I need to build medieval town, so I made some modules like walls, doorway and so on. Question is what's next. Are modules used to model some enviroment only, or then it should be joined in one model with couple materials. Are small buildings should be built from modules, or it can be single mesh as well? How this process goes in professional studios? I tried to search some information about how darksouls, or risen etc. were made, but unfortunately found nothing.

You can build things from these models and actually merge the parts to make a single object (ex: a corridor from modular parts). You don't have to, but depending on how you are setup you might make the GPU use more optimized (reducing draw calls). You don't have to go and make everything one way OR the other. Sometimes it will make sense to build with just the modules, sometimes large pieces will be more practical. Either way don't forget to make some parts and details unique (non-modular) to reduce the repetition of things (make it less obvious at least).

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