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Decent suggestion, may definately help some lag issues, at least in regards to internet lag. But then it would only help the connection of the players to the individual server.
However it may cause some logistic issues within the game. There still would have to be an interconnection between the servers, which if distance is the culprit could even cause more bizarre things if the servers themselves lag in communication to each other. Unless you want to eliminate the friends list concept all together as well.
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