Question: Why do soldiers bandage their firearms?
Rather, in Video Games (specifically MMOFPSs) there are usually guns that have this sort of "cloth" around them, what is this for?
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I assume it is so it doesn't chaff when they hold them.
If it is sort of with a frilly or ragged edge, it is for camouflage purposes. Either to break up the silhouette of the weapon (think of it as a ghillie suit for the gun), or to break reflections from the weapon (an anti-glare treatment of sorts). Other than that, it can also be used to reduce the noise of metal on metal to some extent, in a stalking situation.
Zam 10 points
As Zam says the weapons tend to reflect the sunlight and give your position away to the enemy, so we camoflage them with cloth.