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Because elsewhere was the N64.

Nowadays the reasoning people give for putting former PS3 exclusives on the 360 is "USE BETTER COMPRESSION METHODS!!!!"

During the PS1 era (not even today still) no amount of compression would make 700MB fit onto 64MB. And don't even get to multidisc games. Ever wonder why the music on N64 games was a 5 second .wav file that repeated over and over and over again, instead of full audio tracks? Every wonder why you never saw any FMV sequences on N64?

Now if you're talking about the Saturn....that just failed completely and putting games on there would have been fruitless