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Well, I guess that there are multiple ways. Using more than one disk is a good way, heavy compression and longer loading is another way. Procedual textures would be good, but I think they'd just add a whole lot more of time onto the already extensive timeframes.

One way is just to release the main game, and sell map packs and expansions later on. This solves the problem and it generates waves more cash.

Also, 'unlockables' on games could be downloadable. This would be a plus for Microsoft as it would encourage the core users to buy themselves a HDD. And it saves space.