I think the biggest problem with consoles right now is they're turning into PCs. It used to be PCs and consoles had their own niches. Hardcore gamers played PC. It was a lot more complex but you had more to do, online play, internet in general, you could do your work on it. Consoles were simple. There wasn't any internet, but there weren't patches, or hardware compatibility issues, or anything like that. You put in the CD and played.
Now there's patches, hardware, fucking installations, bugs, social networking, premium features, everything that made consoles good compared to PCs is going away.
As for controllers vs. kbam, it depends on the game for me. Most FPS games I use the mouse. Most other games I use an XBox controller though. For some reason kbam feels more immersive, and if it's an immersive game I might use kbam.
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Oh wait, Far Cry 3! I got it yesterday. Campaign's good so far, I like the characters and it's more... personal? than Far Cry 2. The original had a little bit of this, but Far Cry 3 especially, it's really easy to see yourself in the character's shoes, at least early on. He's just a kid forced into some seriously crazy shit, although he adapts a little better than I would, what with his sickass magic tattoos.
Multiplayer is also pretty cool. In a lot of ways it's just Call of Duty, but then again there's a reason millions of people play Call of Duty.
On one hand I like the decoding, just the addition of a loot system so things aren't 100% unlocked as you go, but the time aspect seems arbitrarily tacked on to be annoying.