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Do you have everything on the highest quality level in the video settings?
Yes, apparently the Havok engine 2008 has those graphical limitations, all the games with the Havok engine from that year have those shadows
I am no expert in the engine, but I suspect that it may be the case, that is, that the shadow rendering algorithms are not subject to external change besides setting them to the highest level in the settings. Characters cast an accurate representation of shadow, but structures seem to cast ugly blocky shadow, which looks bad. Perhaps WSE (or WSE2) is better in this regard.
