Cobalt Katze brought up a few interesting things, let me elaborate on them (I wanted to answer earlier but was not at home).
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Originally Posted by Cellius
One, obviously, the considerable expense of hiring and recording a professional large orchestra. If fans are going to be satisfied with orchestral music, they're not going to settle for a small ensemble to convey Zelda.
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Define "professional large orchestra".
Super Smash Bros. Melee was an orchestra formed individually by Nintendo consisting of 44 instruments and I don't know anyone who is unsatisfied with their performance. Additionaly that title was not even from one of Nintendo's most popular franchises (by that time), still they went for an orchestra. Yes, I am aware of the fact that just a quarter of the tracks are orchestrated. But that's still a lot for a Nintendo game.
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Originally Posted by Cellius
Space considerations. Audio takes up space. If you want a full, live orchestral score, you need to allow for it, which means other aspects of the game need to be cut down. Things like, oh I don't know, LENGTH? Not to mention any part of the graphical engine.
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Nonsense³.
Twilight Princess uses 998 MB of the 1392 MB game-disc. The audio uses up 532 MB, from which 54 MB are sequenced tracks and soundbanks and 380 MB are streamed cutscene music (the rest are SFX).
That totals out to another 448 MB (1392-(998-54)) for orchestrated ingame tracks (the 380 MB don't change because it's streamed music anyway). Orchestrated soundtrack totally possible.
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Originally Posted by Cellius
Have you noticed the subtle changes in music depending on Link's actions or environment? [...] This is precisely why MIDI is ideal for video games, because it dynamically comments on the action and environment. This is impossible with bulky audio files that are fixed and static. As for cinema scenes? Yeah, sure, throw in a real orchestra, but as the quality of MIDI samples continue to improve, the quality difference between sequenced music and recorded music will eventually be indistinguishable, and it just makes sense to sequence in-game music on the fly.
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Wrong, yet again. See
CRI MW. Dynamic tracks are just as possible for streamed music. The best example for that is
Phantasy Star Online. It uses streamed ADX tracks and blends in seamlessly with another file when a battle begins. CRI Middleware also allows various streamed sound tracks (in
Twilight Princess they would be used for the Hyrule Castle Tower theme). This system is primarily used for the ambient pieces in
Silent Hill 2 (PC).
Then again, I'm not complaining about non-orchestrated music - I just demand non-shitty soundbanks. I'd be ok with a MIDI-based soundtrack if it used high quality samples. The prime example for this is of course
Final Fantasy Crystal Chronicles which uses such realistic instruments for its MIDIs that they nearly sound like pre-recorded audio. Best MIDI-based soundtrack on GameCube.
There's nowhere I can't reach.