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The problem isn't with how many people are on the lot (unless you have an ancient computer or are on dial-up). The problem is with how many people are in the game. We're getting more people logging on concurrently than at any other point of time since after the N&I version was released. A few years ago, EA had "repurposed" about half of TSO's servers because they just weren't seeing the traffic. Now, with half the servers we started off with, we're seeing traffic seen only in the beta days - and the servers can't keep up.
Trust me, though - they
are doing something about it.
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I can agree above, however recalling beta days far to well, and the early public days... it is more then just this, but a combination of things. Open lots, like garden lots, non building styles were first created as I recall because it was "less" on property, not because of beauty. I remember going on my first grass skill lot and everyone thought the woman was crazy for not building up, however... with full house, she had the less lag then anyone else with a busy lot I'd been on. Which is why, when I build, I don't set out alot of un-needed objects, few extras for room score, and going with theme look.. but not over abundence.. I have buildings, but not the full lot is done in walls and floors, alot of open space usually. Rarely, less the game itself is having issues, had I gotten the lag down. So yes, combination of the game servers, amount of build/objects, on top of how many sims are on your lot... along with your own personal computer setup... Also may add, if you're playing multi sims at one time, that for sure will help in contributing to your lag.
Just my view here from experience