With a TV you should always use the RGB Limited setting. Limited refers to the values being limited to 16-235 and not the Full 0-255 scale. With TV and Movies, it leaves them untouched because they are already in the 16-235 range. When you play a video game, it will convert the 0-255 range to the 16-235 range. If it did not do this, shadow and highlights would be pure black or pure white, and the image will look off. You aren’t losing anything by using RGB Limited, but if you use RGB Full with a TV you are losing details.
Q: Since video games use the Full RGB palette, shouldn’t I use Full RGB when playing video games and then Limited RGB for movies?
A: No. Most video games are designed using the Full RGB spectrum since they are designed on computers which use that. However, when you are playing a Full RGB game and your video game console is set to Limited, it takes this into account. The video levels are shifted from 0-255 down to 16-235 and the gamma curve is adjusted to match a TV as well. You aren’t losing anything as the system is accounting for this.
Q: When I choose limited, I get a washed out image. When I choose full, shadows are crushed. Which is correct?
A: If you are on a TV, then Limited is still correct. The washed-out image is caused by your brightness setting being too high. You should use a calibration disc, like the free AVS 709 disc, World of Wonder, or Spears & Munsil, to set this correctly. Then your black levels will be correct in limited, you will see shadow details, and it won’t be washed out.
Q: My TV supports Full mode, shouldn’t I use this?
A: No. TVs support Full to make them easier to calibrate. Most TVs will not display a black level below 16 because video content should never have it. By letting you see Black 15 or 14, it can make it easier to calibrate the display and get the black level correct. However, you really should not use this as your main setting as most displays are not designed to display levels below 16, and often introduce color tints when doing white levels past 240 or so. Additionally, if you restrict yourself to levels 16-235 you wind up with a brighter image with a better contrast ratio, as you can turn up the contrast level higher. Contrast Ratio is the thing your eye notices most, and so it will produce a more pleasing image.
Also, since any non-video game content will only use 16-235, these picture settings will work for all inputs and sources, not just a single source.
Q: Should I set my video game system to Auto instead of choosing Limited or Full?
A: No. If you can choose Limited or Full, you are best to do this. The system will choose based on the EDID of your display, or your receiver, whatever it connects directly to. Usually this is fine but some devices report incorrectly, or the system interprets it incorrectly. A good example is the Roku 3, which doesn’t let you change this setting. A receiver I was tested reported an incorrect EDID to my Roku, forcing it into Full RGB which crushed all the shadows and made the image look bad. Had the Roku let me change this, I could have avoided the issue. Since you know which you should pick, you should always do it because you can avoid complications.