However, i'm not sure if they are using texture maps or vertex colors. Which technique would be ideal for games? I've read that not all engines support vertex colors, but isn't that a basic feature for OBJ models?
UVing a small texture(or a small area of a single, larger texture) would be much easier. In order to use vertex colors like that, you'd have to split up every single model that will use a different color, or add support edges everywhere, otherwise the colors will blend between the vertices.
If you can apply your vertexcolor to what Maya calls vertex-face, the colors dont blend.
Vertexcolor can be saved or baked into maps, and can be applied easily.
I did something similar in the past, and used vertexcolor to add variation to already textures roofs.The engine didnt support vertexcolor, so i added it to the (mental ray baked) lightmap.
Yeah, look into face colours! Max has the same thing, as does Blender. I'd be surprised if Modo/XSI/etc. can't do face colours. The only 'issue' being that it creates double vertices at the borders, but given how much less demanding vertex colour is than textures, depending on platform that might be worth it.
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Vertexcolor can be saved or baked into maps, and can be applied easily.
I did something similar in the past, and used vertexcolor to add variation to already textures roofs.The engine didnt support vertexcolor, so i added it to the (mental ray baked) lightmap.