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To me it is about focus. If I am interested in game AI, I can mod a game and focus on just the AI. No need to build out the rest of the art assets and design.

If you are a big fan of open world games, GTA and Skyrim took teams of a 100 people, years of effort to make. Not something an indie is going to be able to reproduce. Modding allows you to create in that world.

Third would be reach. Getting people to try out a mod for a game is often much easier than getting them to try out a whole new game.



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