Yet MSI and Windows Update love their gazillion of tiny files, probably one of the reasons why WU is so slow (aside from the "let's solve P=?NP" thing that Windows 7 does). Game devs have got it right for decades though, practically every game ships their own little take on random-access ZIP archives (they often used profiling to arrange the files inside the archives in the order the game would load them as well, though that is probably less important these days), because that's so much faster than using the host file system.