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This should put an end to that line of thinking.
I refer you to the post by Deodatus (GNH Community Manager) on the GNH forums:
http://community.godsandheroes.com/jive4/thread.jspa?threadID=1274&tstart=0
"The other major issue, as I mentioned, comes in server costs. Since more than 80% of our game is non-instanced, that means that we're talking about 26, 1 square kilometer non-instanced zones that we have to support and keep stable for thousands of players at any given moment. While we do have the lead designer of Diablo II on staff, our server system is dramatically different than the "meet-in-a-lobby-and-connect-to-a-game" type of play. "
Comments
"It is better to die on one's feet than to live on one's knees,"
"It is better to die on one's feet than to live on one's knees,"
You can't really measure it like that anyway, it depends how big the 90% or 80% of the non-instanced areas are, hearing about how big the 80% is I think it wouldn't matter how much was instanced.
Also I think G&Hs is making use of instanced areas in quite a few different ways, it isn't just instanced dungeons, there's the arena instanced areas and camp instanced areas.
Thus, we decided to instance areas and quests that would detract from a player's experience otherwise. You don't have to follow these quests, and you don't have to follow the story. Heck, you don't even have to go into these instances if you don't want to, but honestly, you'd be missing a significant portion of what we have to offer you.
Just know that the instances are in no way detracting from the non-instanced areas.