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How to make "Transparent Textures" the easy way.

A Tutorial for Half-Life

Re-uploaded due to being withheld. - 1/17/2018
Edited due to being withheld again. - 1/18/2018
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In this tutorial I hope to demonstrate an easier way of making those pesky transparent textures that have R:G:B: blue areas that disappear when used in the Half-Life 1 engine. Please note this tutorial is made using Photoshop 6 and that I am unfamiliar with any other art software beside it. I hope this tutorial will help make things easier for those reading it.

This tutorial was inspired by the great DocRock, thank you sir for your encouragement and support.
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Before you begin you will need the Following Software:
Photoshop 6 
(or greater)
Wally 1.55 BETA
Hammer 3.5.3
Half-Life (Latest build.)
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STEP I: 
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Let's begin by making a new image in Photoshop and be sure your
“Background Contents” is set to “Transparent” as seen in the below image.
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STEP II: 
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Next we should have a blank pallet that will odiously need some 
kind of content. For this tutorial I will be using a texture I created 
myself of a metal grate cover.
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STEP III: 
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For the next part you can use 1 or more tools to remove the parts you want to be transparent. Alternatively, if you make the texture from scratch like I did then the process becomes much easier through the use of Layers. I suggest looking up Photoshop tutorials on using Layers, Lasso tool, and the Magic wand tool.
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STEP IV: 
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This next step is very important, make sure your background remains the checker bored transparent background color or this will not work! Once you are satisfied with your texture you will need to change it’s format to “Indexed color”, this is done by clicking image at the top of Photoshop then choosing “Mode” and lastly “Indexed color”. Choose “Yes” when asked if you want to flatten the image which will merge all layers into 1. 

(So you may want to save your source file as  a .PSD file before proceeding to this step for later edits.)
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STEP V: 
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OK! This is the step that makes it all work, after we have “Indexed
Color” our image we will need to edit it’s color table, so begin by repeating the last step but this time choose the “Color Table” option.
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You should now have a window that looks similar to mine but will
vary based on the colors in your image, mine is black & white so
the pallet isn’t very big as you can see. 
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Look for the last square in the pallet that displays the transparent
background color and click on it to bring up it’s color values, you
will want to edit it’s R:G:B: values R: 0, G: 0, B: 255 and then click OK.
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STEP VI: 
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We are almost done now! Save your image as a .bmp image format via File > Save As to the location of your choice.
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STEP VII: 
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Now open Wally and create a new .wad file and then open your .bmp image you saved from Photoshop in Wally, right click this image in Wally and choose “Copy”, then right click your wad field and choose “Paste as New” which will then give you a new menu used to name your texture, this is a critical step! You MUST put a { at the beginning of the textures name for all transparent textures or the Half-Life engine will not know it’s meant to be a transparent texture.
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Save your .wad with your name of choice  to your Half-Life directory and then make sure to add it in Hammer configuration, set your texture up in a Hammer map and your good to go! Enjoy!
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ENDING RESULTS: 
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THIS TUTORIAL IS ALSO AVAILABLE IN A .JPG IMAGE FORMAT:
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DiscountKiller
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DocRock
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