One of the main "selling points" of Red Faction was the game engine's GeoMod technology, which allowed players to significantly alter and otherwise affect the surrounding terrain and buildings, either with explosives or otherwise. Past games had allowed limited alteration of the environment through scripted means, or special triggered areas which would add or remove certain predefined level elements. Red Faction was the first game to allow players relatively limitless level-altering possibilities. In fact, many of the areas in the first few levels, such as a hidden underground lake, serve little purpose other than showcasing the capabilities of the GeoMod technology.

GeoMod allows the player to alter (and destroy) the environment so significantly because of the way it designates altered (or "GeoModded") areas. Whereas other game engines would have to modify the shape of the altered object to create a similar effect, GeoMod creates special objects which represent empty space. When, for example, an explosion blows a hole in a rock wall, the GeoMod technology creates an "empty space" object which is the approximate size and shape of the explosion. The training level uses a much larger "empty space" object than the rocket launcher is able to produce in other circumstances, simply because tunnelling is required to complete part of the level.

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