As already stated many time on these boards HDR rendering can be done in many different ways.
Most games use FP16 render targets: this is the most straightforward and simple way to do it, quality is also very good, though unfortunately FP16 render targets require a lot of memory and bandwidth: every pixel needs 8 bytes in video ram to store its color data.
On the other hand colors can be represented (different color spaces) and encoded (different layout in memory) in many different ways.
We use a 4 bytes per pixel format that has the same luminance range of a default FP16 format, though it's completely scalable changing some costants in a fragment shader.
The quality is outstanding, I was never been able to reproduce a single case where FP16 had a better quality than our funky color space.
I silently ran the game over a week using FP16 on the upper half of the screen and funky colors on the lower half..and I was randomly asking question about the image quality to people in the office that were occassionaly standing close to my desk: no one has ever noticed any difference.
It's also very easy to bring FP16 on its knee on night light scenes, very low luminance (close to zero!) produced noticeable banding (but this effect can also be a function of a particular tone mapping operator), the 4 bytes per pixel version was much better, banding was still present though.
Also we don't use YUV or HSV color spaces, we went for a custom CIE Luv space.
Except NAO32 is not going to work for all games, it's simply a good solution for HS's specific lighting requirements. For example, the KZ devs stated it simply would not work for them, so it obviously has limitations.
AFAIK KZ renderer is fairly different from HS renderer and makes perfctly sense for them to not use our color space, but it's not an issue related to lighting requirements, in fact we support a VERY broad (and accurate!) range , thousand times broader than FP10 on Xenos.