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Depends on the game and the system.

Music, Mario, and Street Fighter games are much more memorable played local.

FPS and MMORPG cannot exist without some form of online capability...As the expectations stand today. Reflect back to the N64 Goldeneye and the Xbox Halo days, then sure FPS played locally was expected and a blast. Then again, Counter Strike was not too many years removed from Goldeneye.

For me, overall, I have had more fun playing local multiplay. Sure I spent 3+ years on the World of Warcrack, but I enjoyed guild chat more than the actual raids because failure in raids was a witch hunt on Vent to root out who caused the "wipe" and "give us 5 reasons why we should not replace you" type screed.

Local all the way.