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It has to run in 1080p. 720p often looks blurry on a 1080p TV.

I often experienced blurryness with X360 and PS3 games running in 720p on a HD TV. And today, a few years later, I would guess my tolerance for blurryness has decreased even more.

1080p really is a perfect resolution. The difference between 720p and 1080ps is huge, but with resolutions higher than 1080p diminishing returns kick in. 1080p is the sweetspot.