Systems and methods are disclosed for operating, calibrating, and dynamically optimizing a system for a virtual reality environment where colored marker lights are attached to objects, the objects including players, controllers, and devices related to the game. One or more color cameras are used to view one or more spaces, and track positions and orientations of players and other objects according to the attached marker lights. A hierarchical system of servers may be used to process positions and orientations of objects and provide controls as necessary for the system. A method for color assignment is described as well as a calibration process, and a dynamic optimization process. A synchronization process is also described that ensures that a plurality of cameras and attached servers are properly coordinated. Head-mounted devices may also be used in conjunction with marker lights to provide information regarding players.