The Proof of Concept Gameplay milestone is used to determine if a game is actually fun. In this milestone, the team may not have an actual level of the game to play in, but the primary features of the game are present. For example, in a platformer game, the player would be able to jump and would have multiple platforms to jump on. This milestone gives the developers a good understanding of which parts of their design are fun and which parts need to be rethought.
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