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RED is the Red Faction Level Editor. RED is usually assumed to mean "Red EDitor".
Levels in Red Faction are comprised of BSP brushes and meshes exported from 3D Studio Max 4.2 or 5.0.
Purpose
The purpose of RED is simply to produce levels (maps) for the PC and Playstation 2 game Red Faction.
RED can also be used to test various edits when developing Mods.