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In the previous examples, I've used what is known as Rigid Body Animation. In Rigid Body Animation, the entire object is animated. If I wanted to animate just the arms, I would need to have the arms as a separate mesh that contained information needed to translate them into the proper location. Within a full game, there might be hundreds of meshes at any one time, and this would be hard to keep track of. Furthermore, if I wanted to deform a mesh, to make Santa's belly shake, for example, I would need to understand the makeup of the vertices inside the mesh. Skeletal animations can solve this problem.
As the name implies, skeletal animations modify a skeleton that is attached to a mesh. Skeletons are composed of bones, and each vertex contains a weight value that determines how much of the vertex's position is determined by the location of each bone. The XNA Model class doesn't support skeletal animations, but the XNA Framework provides everything needed to add this support and use skeletal animations in a game.