Improved video quality has helped webcams encroach on traditional video conferencing systems.

New features such as automatic lighting controls, real-time enhancements (retouching, wrinkle smoothing and vertical stretch), automatic face tracking and autofocus, assist users by providing substantial ease-of-use, further increasing the popularity of webcams.

By removing the IR filter of the webcam, IR LEDs can be used, which has the advantage of being invisible to the naked eye, removing a distraction from the user.

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The Eye Toy for the Play Station 2, Play Station Eye for the Play Station 3, and the Xbox Live Vision camera and Kinect motion sensor for the Xbox 360 and are color digital cameras that have been used as control input devices by some games.

Small webcam-based PC games are available as either standalone executables or inside web browser windows using Adobe Flash.

Other popular uses include security surveillance, computer vision, video broadcasting, and for recording social videos.

The video streams provided by webcams can be used for a number of purposes, each using appropriate software: Most modern webcams are capable of capturing arterial pulse rate by the use of a simple algorithmic trick.

They have also become a source of security and privacy issues, as some built-in webcams can be remotely activated by spyware.

The most popular use of webcams is the establishment of video links, permitting computers to act as videophones or videoconference stations.

making them the lowest-cost form of videotelephony.

Despite the low cost, the resolution offered at present (2015) is rather impressive, with low-end webcams offering resolutions of 320×240, medium webcams offering 640×480 resolution, and high-end webcams offering 1280×720 (aka 720p) or even 1920×1080 (aka 1080p) resolution.

Webcam features and performance can vary by program, computer operating system, and also by the computer's processor capabilities.