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I think the main problem Microsoft has trying to match a major budget title like Killzone 2 is Disk size. While Sony can pour money in and develop more and more art assets, MS has to repeat textures, and figure out how to save space. Disk size almost certainly limits the length of the game (if its striving to be graphically impressive), and the amount of unique art assets that can be used in the game. Kind of makes sense why the devs would try to compensate by adding modes like split screen and co op instead. If MS has a game that can match Killzone2 graphically, how long is the game, how often are textures repeated, and how many disks is it on? I really doubt it will match up to killzone2 in all these respects.