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I don't think its really fair to make a judgement call based on this, a lot of that scenery looks like placeholder mesh, just simple meshes with basic texture applied, most like from a stage where they were focusing on mechanic and particle effects rather than fine tuning the world.

Even with the focus not being on environments the destructive scenery is nice, too.

It looks in keeping with the original Phantom Dust for the Xbox to me, I'm not sure what exactly you thought it was going to be.