entityblend g_game_world_inner,3 (or 2 for a different effect...)
you need to set the blend mode of the entity. Textureblend will blend the texture with the other textures already applied to the entity. But they will not cause the entity to blend with the background.
you need to set the blend mode of the entity. Textureblend will blend the texture with the other textures already applied to the entity. But they will not cause the entity to blend with the background.