One of the more advanced methods to do hair in games is presented in this paper. The following is the abstract:

“This thesis evaluates, improves and develops methods for generating, simulating and rendering hair in real-time. The purpose is finding techniques which make use of recent hardware to present an as good as possible visual result while keeping performance at such a level that integration into a game scene is viable. The Kajiya-Kay and Marschner lighting models for hair are evaluated, including recent resource saving discretizations to the Marschner model. Two shadowing methods are adapted and investigated for the nature of hair and real-time applications, and one new method is presented as a lower quality and faster alternative for translucent occluders. For dynamics, two models are developed and an existing model for simulating trees is adapted. The implementation uses and takes into account the capabilities and limits of modern graphics hardware, including various techniques that greatly reduces the amount of data sent to the graphics card. The implementation also includes a Maya pipeline for modeling hair. The result is a state-of-the-art rendering and simulation of hair for real-time game purposes.”

 

Link to the paper:
http://graphics.cs.lth.se/theses/projects/hair/