How to reduce AOF Trouble in South Town video here
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It cant be reduced, there are openBOR tutorials on youtube. You have to start a new cleaned project, and make a new game...
the characters take a lot of images, players and bosses go over +200 png images, if you delete them it wont be the same game... You can delete the music and sound effects and save 400mb, but it still wont run on psp...