Having a 50 player cap for guilds can be problematic when it comes to getting the numbers to run endgame content. Except for the most hardcore of guilds, you will usually have a wide range of levels and playing times. Getting enough high-levels together at a certain time for a Guild Dungeon might not happen right away.
This is where Nations and Nation Dungeons come in. Nations are alliances of up to 10 guilds and the Nation Dungeons are endgame challenges which scale in difficulty. If Guild Dungeons can be run with a maximum of 50 players, Nation Dungeons can be run with a theoretical max of 500 players. Access to the B grade mercenaries (currently the highest grade in the game) relies on drops that can sometimes only be found in Nation Dungeons. So if you want a Spartan, Pirate, or Elementalist in your formation, you would be wise to seek out a Nation that has access to and can successfully run Nation Dungeons. Once you join a Nation, you gain access to Nation chat and can share info with Nation members as easily as with guild members.
The leader of a level 30 guild can go to the Caesar NPC in Rome and start his own nation for a fee based on the number of starting guilds. The roster of 10 allowable guilds allows for a wide variety of member guilds and the Nation leader has to seek out like-minded guilds with a decent amount of high-level players in order to grow his Nation. There's a considerable amount of diplomacy involved and the reputations of players and guilds go a long way towards convincing others to join your fledgeling empire.
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