I should also mention that another advantage of advanced LOD systems is they could adjust the detail of objects in the environment based on a wide variety of rules that (roughly) judge how likely someone is to notice the detail. Hypothetically speaking, if you were playing a game and there were no enemies around detail could be set to the platform's maximum level, and as more and more enemies came on screen it could reduce the distance representing increased detail and lower the detail level of less noticeable objects.
The net result of this is that when you're walking around and the game is building mood you really get the benefit of everything looking very detailed, but when you're in a firefight with 16 other guys you (probably) don't notice that detail has been reduced to maintain the framerate.
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