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KruzeS said:
Also, with consoles you can't really handle direct connections between clients all that well, which is a common solution for PCs.

I'm not sure this is correct.  My understanding is that nearly ALL 360 Live titles actually run the games peer-to-peer.  Xbox Live servers simply set up the game, then pick one of the members of the game to be the host. 

 Halo 2, Halo 3 beta, CnC3, Gears, R6V, Shadowrun, etc. all worked this way.  You'll notice if you are in a match and the hosting player drops out, the entire match pauses while a new host is selected from the remaining players.

Also, the Xbox live servers attempt to match players with an eye toward latency, which would mean that if enough people were online and looking for a game, you'd be paired up with other players who have great ping rates to you.  Several of the live titles have indicators that show this.

While 15ms is a very high standard to try achieve, it seems strange to me that it is necessary on a fighting game with only two combatants and no projectiles, and yet games like Halo 2 track 16 individuals all issuing commands real time with vehicles, projectiles, bouncing grenades,  etc.

Think about how the H3 "man cannon" works for example.  You are flying through the air across a massive battle field at the speed of roughly a fast flying bird.  Other players can see you aim your gun and fire while you are in the air, and a good sniper can raise his gun and pull off a head shot!  Meanwhile 14 other players need to be transmitted all that information and send in their responses.

That, to me, seems a heck of a lot harder and would require lower latence than two guys fighting one quickly needs to send the block high command because his opponent has started the "high strike" manuver.