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Game Development Dictionary
Clipping occurs when a device is transmitting more signal than it was designed to handle. The distinct sound of audio clipping is created by the waveforms getting "chopped off" before they (the waveforms) reach the peaks of their excursion. Creating, esentially, a square-wave. The higher the amplitude, the closer the waveform resembles a square-wave, and thus, the more noticable the sound becomes. Clipping is found useful in some cases ie: overdriven guitar effects.