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For the people that have questions about the size of the games. You also have to look were we came from, memory was expensive 10 yers ago so making games also included making them small. The GameCube and Xbox both had hardware that could decompress textures on-the-fly with a like 5:1 ratio. And that is nice because it takes longer to read 5 times as much from a disk then to read and decompress a fifth of it. (and even less if its hardware dedicated)

Also mind that 3D enviroments are cheap. Memorable 80hours+ games like Ocarina of Time did fit on a 32MB cartidge. But only thanks to low resolution.
Yet if you see that games were for years sold on a multiple CD solution, you can guess that the size of those games was just average.

Point is that the game consists of two major parts, textures and pre redendered videos. I don't remember witch game it was but i think resistance of witch the developers wrote a NTSCtoPAL converter because the 6GB of PAL videos took to long to write a prototype game.

Eventually we'll see XBox 360 games coming on multiple DVD's but I don't know if the appreciation of a game has ever been lowered by a multiple disk solution. Look at PC-games where you have to search the disk only to start the game, no much complaints about that. On the other hand i think many people would prefer to change a disk like 20 times in the lifespan of their console then to pay a 200$ surplus and the additional cost of Blue-Ray disk that is in fact slower then a DVD disk. And all the data on a blue-Ray disk have to be read once...

Conclusion: textureless 3D gaming enviroments are cheap and textures are compressed on the fly by the GPU by means of S3TC look alike hardware solutions that compress to a fifth or lower of the original size. The real space eating part are video's, it's up to the developer to make the choise between a bandwidth intensive codec like H-264 or one like DivX and what resolution. Also how do you manage them, you simply store a 1080p and 720p and 480p copy or do you resize them on the fly.
On the consumer end, some will see the difference between a high def codec and a low def one. But most of us don't, or don't care. And not all those who care will prefer a 200$ solution above a 15$ solution.
Finally you can question if it is desirable to have prerendered video in a game or just use the engine to do the dirty work. Also do we want hour and hours of video in a way too short video game that costed 60$ in the first place and is these days too short anyway? The fact is Sony wants to push their expensive patent protected Blue-Ray format over the low cost patent-pooled HD-DVD. So we should now have to pay more to pay even more for our movies in the future and to have lazy developers pushing and pushing more boring loading-videos into our games.
Don't be fooled, where bandwidth and space or memory is limited, engineers get creative and innovative. Game's don't suffer these days from shortage on storage but by politics that think games are made by the Umbrella Company and will soon turn us and our children in mindless zombies.