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Space leaks are the real problem, and not just for the reason you state.

These days it's hard to even buy a computer with less than a gig of RAM, but the Playstation 3 - the most powerful console of the new generation - has only 256 megs. Granted, they're 256 really fast megs, but it's still a tiny amount of space by modern standards. You don't even have a hard drive to swap to when you run out of space - if a memory allocation fails, you work around it by hand or you crash.

If you're going to write a game engine that's meant to run on consoles, you really need fine-grained control of all the memory allocation in your system. That'd be my big worry with Haskell, more than speed or garbage collection latency or whatever.

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