I think making a new server would be silly. 700 people at peak times is arguably not even enough to fill the Kunark zones - we could easily have an additional 300 people really.
The problem, though, is that the vast majority of players on P1999 used to play live. When you combine that with the slow progression (no insult to the admins, they have jobs and social lives I hope), and the fact that every detail and strategy is known in advance, most of the population is 50+. A new player who joined when Kunark came out on Live would probably not even make 60 by the time Velious was released, whereas now new players join and head to L60 within a few months. So I think there is a problem. As I've said before I think the real solution is just some extra server reboots, which not only add more mobs to the economy, but also give the non-uber a chance to get some raid mobs while the uberguilds (well guild singular now I suppose) are busy elsewhere.
Quizy, and TMO in general: I know you guys are feeling good about crushing VD underneath your boots. Winning at anything, even the most silly things, is never easy, but lets be very clear on one thing: killing raid mobs on P1999 is 99% time/dedication and 1% skill. As was shown today when Acyrid/BDA/Taken killed Gorenaire, the only thing stopping the rest of the server is the fact that not everyone is willing to interrupt their real lives on a moment's notice to go slay a raid mob within 5 minutes, and most of them are in TMO. So I think it's entirely reasonable for people to want to enjoy the endgame without having to commit 50% of their life to this game, but it just doesn't happen on this server, which is why I simply accepted that I'd never get a lot of the items.
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