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The video game Uru shipped with the sounds as ogg files. Post installation they were decompressed to wav files, I'm guessing so that they can squeeze some more performance out of the game
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Why would it play the compressed version if it had the decompressed audio right there though?
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Because with lossless compression you can save a lot of storage space without losing any quality. You are thinking about lossy compression.
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I think you misunderstood his question.

Given two files, a compressed file which must be uncompressed to play, and an uncompressed one which does not require extra processing - why would the game ever bother uncompressing te compressed file when the same data is already available uncompressed?

There's no true use case for that that I can see.

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With hard disks, I could see reading the compressed version from disk and decompressing giving you the bytes faster than reading the uncompressed version. With SSDs that advantage likely went away.
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I would guess to save on installed size?
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