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720p or sub-720p wasn't horrible for 2006 it was the standard for the time and peoples expectation were met, it was also the best the PS3 and 360 could do, but like anything, standards change over time and so do expectations.

Move to 2013....1080p TV's and Blu-rays are the norm, there was an expectation from console gamers that the newly announced Sony/Microsoft consoles would do 1080p as that was the current standard, and Both Sony/Microsoft met that standard with the marketing.....problem....when both consoles launched only the PS4 seemed capable of actually delivering the native 1080p experience for the overwhelming majority of it's games, while the Xbox One was stuck with the majority of it's games being 720p.

In peoples mind, the PS4 met the current 1080p standard and satisfied the console gamers expectations, the Xbox one simply hasn't been able to meet the same expectations....so people complain, tech sites like Digital foundry dig into games and reveal the differences between the PS4 and Xboxone versions (because it what they do) and this unfortunately led to resolutiongate...again because expectations were not met.

Now if either the Xbox one delivered the goods like the PS4, or if the PS4 performed like the Xbox One and delivered 720p for most games, then people would eventually adjust their exceptions accordingly, even if the second scenario was a bitter pill to swallow.

So to conclude, 720p wasn't horrible for 2006 it was the best of it's time, but standards and expectation change over time as technology and it's adoption also increase over time. So now in 2014, 720p isn't exactly horrible but it also isn't ideal because there is ONE console on the market delivering 1080p for practically all it's games, so when consumers have an option to play the same game on their 1080p TV's, then Natively rendered 1080p games will always win out. The PS4 being cheaper also doesn't help the Xbox Ones situation...as for the WiiU....well Nintendo is stuck in what ever time bubble their in, cuz while we're in 2014, they seem to have just hit 2006....but that's not here or there.