Gamers are scoffing at the decision, saying that advanced technology has made it commonplace in the gaming world to let players switch sides and play the bad guy.
"Medal of Honor" by Electronic Arts, a major game developer based in California, hits stores Oct. 12.
After public protests, including by British Defense Secretary Liam Fox, U.S. military officials decided not to stock the game in any of the nearly 300 base exchange shops.
Fox said last month that he was "disgusted and angry" by what was a "tasteless product." Fox called on retailers to show their support for the troops by not selling it.
"At the hands of the Taliban, children have lost fathers and wives have lost husbands," Fox said. "It's shocking that someone would think it acceptable to recreate the acts of the Taliban against British soldiers."
The game also will not be sold at any of the 49 GameStop stores located on various U.S. military bases. Troops will be allowed to own copies, but they would have to buy them off-base.
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