I had a friend who owned a PS2 for mainstream/casual gaming. Just football games and GTA etc. I accidently introduced him to Contra 3 and he loved it. I mean, REALLY loved it. Then I got him into Gitaroo man and he loved that too!
I'm not saying that these games are better than the games he was playing before, because he's the only "casual" I've ever successfully "converted" (I use "" because I don't make a habit of forcing my tastes upon people!) The point is he was a "hardcore" gamer all along, it was just he didn't realise it because he'd never had the chance to play these games.
There's probably a point in here somewhere in this anecdote, but I'm not really sure what it is. Also, would the industry benefit from going single format like CDs or DVDs?
