State machines are what game engines use to control what animations are being played and when and how they blend and transition. State is a reference to the Characters current state such as walk stand idle, turning left dying etc. It can be used to setup conditions and flow for animations in your game. Below is a link to using one in Unity.
http://docs.unity3d.com/Manual/StateMachineBasics.html
http://docs.unity3d.com/Manual/class-State.html
http://docs.unity3d.com/Manual/AnimationParameters.html
http://docs.unity3d.com/Manual/StateMachineTransitions.html
The following link goes into more detail about sub states. This would be for example when a going to one state means it will transition between several states such as the starting state of standing then a transition to a sub state where it will have a standing to run then a looping run state.
http://docs.unity3d.com/Manual/NestedStateMachines.html
http://docs.unity3d.com/Manual/StateMachineBehaviours.html
and its script reference
http://docs.unity3d.com/ScriptReference/StateMachineBehaviour.html
http://docs.unity3d.com/Manual/AnimationSoloMute.html
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