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A Spot Light emits light from a single point in a cone shape. Users are given two cones to shape the light - the Inner Cone Angle and Outer Cone Angle . Within the Inner Cone Angle, the light achieves full brightness. As you go from the extent of the inner radius to the extents of the Outer Cone Angle, a falloff takes place, creating a penumbra, or softening around the Spot Light's disc of illumination.
In the image above, we can see that the Spot Light has a very narrow Inner Cone Angle and a much wider Outer Cone Angle. These are defined in the Details panel when the light is selected.