WHY is there a 2 chest , 1 chest, 0 Chest limit on savage?!

It's fine as is. This really is only a problem for PUGs.

Yes, the current system is the comprimise, but honestly still has room for improvement, as someone else showed.
the whole
1-2 already cleared = 2 chest
3-6 = 1 chest
7-8 = 0.
Still seems decent.

Though I'd maybe go as far as
1 = 2 chest
2-5 = 1 chest
6-8 = 0 chest
Because lets face it, 4 people can nearly carry the group for sales, so 5 for sure can.
but 5 is still within reason imo.
6+ you're asking for too much, and should be 0.
1 is never too much, and as the poster before said, maybe even 2, but for now, lets ask for 1.

The intention is to clear it once a week and for 8 people to get 2 drops. Just because we can help other people with the fight after already clearing doesn't mean we're meant to help them get loot. At least 75% of raiders are not meant to get loot from each encounter, and if some team members are not eligible for loot anymore the system has to compensate somehow.

There are a couple of ways to change the system while keeping it random and making sure 75% of raiders are left without a drop. The first one is from WoW, where loot dropped based on the number of people still eligible for loot. The difference to our savage system was that each player who hadn't killed the boss before increased the drop chance for loot. To give an example of how it would work in FFXIV, if 7 out of 8 players are able to loot then there would be 1 guaranteed piece of loot and a 75% chance to get another drop (7 * 25% = 175% = 100% + 75%). Those who already killed the boss wouldn't be able to roll for loot again. On average this system would give the same amount of loot as what a full static gets week after week, and most importantly the system could not be gamed because you wouldn't benefit from inviting someone who has already cleared.

Another way to change the system would be to have personal loot. You'd simply have a 25% chance to get some gear piece suitable to your current job. Knowing SE system limitations you probably wouldn't be allowed to give it to party members, and this would not be ideal for statics who don't want to waste drops or who want to feed gear to a certain member.

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Originally Posted by Riko_Futatabi

It's another one of those convoluted SE ideas to drag out the loot distribution. They should use something similar to the 24-Man raid system for weekly loot. Open chests and be eligible for 1 piece of loot per week, per encounter. So a possibility of 4 rewards a week from chests.

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Dragging out loot is pretty much the only means that SE has of maintaining subs.
Using the 24 man style loot system wouldn't work for savage raiding unless they converted the ENTIRE raid tier into a single instance, because a competent group can clear all 4 savage bosses in a similar time frame that DF randoms will complete Rabanastre. And if SE kept the savage content as 4 different encounters, they'd have to increase the dps checks on each fight based on the assumption that a world prog team is going to have 1 drop per person per encounter prior to it, instead of tuning it for the current tier of crafteds (or lower). AND they'd have to completely remove the manifesto system, as that was put in place to counter RNG, which would be moot for a loot system like you suggest. So now, we'd have groups running each turn 8+ times a week fishing for specific drops, and the entire raid tier would be dead in ~4 weeks. Honestly, I'd rather just clear each encounter once a week than have to deal with the excessive repetitiveness and grind that an Alliance Raid loot system would bring to the Savage side of the house. And that's from someone who raids with a static. Imagine how much cancer this would all be for people whose IRL schedules can only support them grouping with randoms in the PF for Savage clears? No thanks.

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Originally Posted by Riko_Futatabi

It's so stupid to punish people for wanting to repeat content.

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Don't worry, there's a completely separate system in place specifically to reward people who want to just repeat content. New relics are coming :)

Also, the current system doesn't "punish" people who want to repeat content. The fact that repeating it on the same character doesn't throw rewards in your face (outside of gil or paypal monies from page sales, additional tomes, or that warm fuzzy feeling you get for helping people) is by no definition of the word, a 'punishment'.