Region-locking: truly a two-way street that goes nowhere.
I don't understand what they are trying to accomplish here. the PS3 doesn't have region locking and they seem to be doing fine.
Games are probably more attractive to small publishers like Aksys if they aren't region free. Imports of niche titles can cannibalize sales in certain genres, and I'd argue that Cave bullet-hell shmups are one of those genres. Interestingly enough, rumor among fans is that Cave was denied the right to release standalone games on PS3 at retail... The localized version of DeathSmiles on Xbox 360 sold over 100k, yet the (region-locked) sequel was passed up for localization.
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