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Splitscreen is a lot of extra work, it hurts the fullscreen version by having two viewpoints rather than one (thus world/render objects cannot be culled as efficiently, and more data has to be accessed, or even just plain exist in memory at once -- physics data, for example. More memory there means less for textures, etc... hurts the single-viewpoint game in the end), and I don't think its a very commonly used feature to the end-user.

Cost/benefit == not so good. That's why its not done much anymore.