I am currently working on a DOTA 2 mod using 3DSMax (DirectX 9 with DirectX Shader as driver and material respectively) for a school project. For some reason, 3DS Max doesn't display the material bellow (Picture for proof). I tried adding 3ds max to NVIDIA graphic card and updating my NVIDIA, but they still don't work.
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At the top left of the 4 individual viewports you can change them to shaded or realistic and it should show the materials again.
As in, make a new object, assign it a new material, and set that to a directX shader. See if it shows up. If so see what is different about the material you have applied to Lion.
Also, why bother using a directX shader in max while you're modding content? The built in shaders are quite good for most standard purposes.
The reason why I use directX shader in 3ds max is that I am trying to follow the criteria of the project. And their mod shader matches with the materials needed in DOTA 2 (as in they have map for each material for DOTA2)