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The device is rebooted after a you choose home. So memory leak is contained to the currently running game.
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Not sure as I don't use C. But you can use the device view in Simulator to see live memory usage reporting from device.
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The device cannot be switched off. Also, see 1.
Interestingly, this old thread of mine was just bumped: Tracking memory usage throughout your game
ps: I had a memory leak using drawTextAligned in Lua, which was not triggering the garbage collector in scenes with little going on.