Why would they add classic on retail realms? That wouldn't make anything living at all. That term is just marketing for making you feel like you are part of a world rather then just a person controlling a character in a video game. In this case it looks like it is just talking about repeatable content being different enough to make it feel like part of the world rather then doing the same thing for the 100th time.
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Have you ever paid attention to the things Microsoft releases? They aren't perfect or paragon of gaming. Halo: Infinite changed its monetization model after out cry. Since the merger was announced people who hate Blizzard have seen Microsoft as some savior by simply because they aren't Activision or Blizzard.

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