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I think a pretty common mistake is to impose some kind of pre-defined notion as to how "large" an instance is. An instance isn't always "just my 5 teammates" or "just me." An instance could easily be 20, 50, or 100 people..
Just because we don't want to see 1,000 people in an area designed for 500 people doesn't mean that you won't have a feeling of it being an "MMO"--that's a bit of a fallacy.
In most cases, I would imagine instancing will be mostly transparent to the player, and in all but a few cases it should not really even be dramatically visible at all.
An example from Anarchy Online, for instance (haw haw), is how shops in cities were instanced so that they never got too crowded. As much as having 200 people crammed into a tiny shop building (or having a MASSIVE shop building that felt totally empty in off-hours!) would be an interesting experience, I much preferred having it be a cozy 20 people or whatever the limit happened to be.
There is a LOT of gray area between GW/DDO type instances where there is hardly any shared gameworld at all, and having everything free-for-all no limitations whatsoever. The difference is quite huge, and there is a happy medium where one can still experience multi-player content without having to have people stacked on top of each other end-to-end. (Which, considering we have player collision, is actually an issue! )
Forums Oct 30th, 2006 (Jayde)
As we have said before there will be instancing in the game, we will use it where it is appropriate to ensure that the relevant area or section of the game is fun! Making the experience enjoyable is the most important factor, and sometimes instancing is the best way (with the current technology available at any rate!) to ensure maximum playability.
The team are using instancing as they should, as a tool to be used in the right places, you can also rest assured that where it is used, its used creatively as well!
It's also important of course to have non-instanced areas as well for players to meet and share some adventures as well of course.
The key thing, as with all game mechanics, is that they should be used where appropriate to enhance the game experience Sometimes instancing is the right solution to a design choice, sometimes its not.
Forums, 16th February 2006 (Silirrion)
We will be using instancing technology for sure. We were the first company to introduce the concept in Anarchy Online and Age of Conan will utilise the technology where appropriate to provide the best gameplay experience for each situation.
Forums, 30th August 2005 (Silirrion)