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The thing is, 720p definitely looks sharp enough to me in favor of having the game run at a solid 60fps. This was the Killzone demo's achilles heel for me. A fast/smooth frame rate really improves the visual experience, IMO.

If the devs really only had half the RAM to work with compared to what's going to be available in the final console, we'll see if they can run graphically demanding games at 1080p/60fps. Otherwise they should gives us the option to select between higher res or higher frames, since there are fans of each preference.