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MS stated last year that they would no longer force game developers to create games at 720p, so it's not that much of a surprise. And it would only be a serious insult if it ended up coming out on the PS3 at 720p (which it won't), so it still has the potential to be a great game no matter what the res.

Considering the amount they did with regards to lighting, shadows etc... I like it and can accept a drop in res to accommodate it. But I don't think it should become the norm.