Microsoft runs a tight ship and demands a certain level of quality in its 360 games. Considering the quality of the 360 itself, that's quite ironic, but nevertheless there are standards that software developers must adhere to. One of those standards have always been a minimum resolution of 1280x720 (720p). However, that is no longer the case.
Black Rock Studio's David Jefferies has confirmed that Microsoft recently dropped the requirement, meaning that future Xbox 360 games no longer need to be in high definition. Previously, the only studio allowed to do this was Bungie, for which the requirement was apparently "waived" for Halo 3.
"Now we are free to make the trade-off between resolution and image quality as we see fit," says Jefferies, explaining how this is a good thing and how anti-aliasing can now be a more primary concern for developers.
It's interesting that Microsoft has dropped the requirement, especially with so many developers acting like HDTVs are in every single American home, which simply isn't the case. Things like Dead Rising's notoriously tiny text are perfect examples of how bullheaded the industry's been over HD, despite the fact that many gamers still have standard-definition televisions. This downgrade at first sounds strange, but is quite logical when you think about it.
Besides which, Halo 3 still looked pretty damn good.