Wasn't this statement made back when the game had, like, 1 million accounts, tops, with less than half of that logging in at peak? Maybe they heavily underestimated the amount of players that would be playing?
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autodemolition is good
Those are two different arguments. Criticising Yoshida for going back on his word is not the same as conflating auto-demolition and taking a break. Put simply, you can still take a break, you'll just lose your house if it extends beyond 45 days.
I suspect that may be the issue. Doing a little digging, Yoshida had that interview only three months after ARR released—before personal plots were even a thing. He either severely underestimated the turn around FFXIV would have, that housing would be this popular or SE overruled him. Could be a little of everything, honestly. It's a bit naive to think they wouldn't need a system like this with such a limited resource. Granted, not going instanced housing from the get go proved to be their biggest mistake.
I imagine instanced housing would include the garden. You would either zone outside your house similar to how apartments work or there would be an ellipses line at the gate like when you enter a new city or zone. If they had the funding, they could do something comparable to what the Sims 4 does with neighbours. Allow players to choose say, five friends where each of their houses will load. This would be entirely separate from everyone else's unless they visited.
As for resources, data storage is incredibly cheap nowadays. The issue isn't space since inactive players simply wouldn't have their houses ever loading. It's that each housing ward always remains on idle. Nobody can be around yet all 48 wards still load every individual house, which inevitably strains their system. Instanced housing would be no different than alts, in the sense it doesn't exist unless you're signed in. That's why virtually every other MMO moved towards this direction.
We very limited, I been waiting for them to turn it back on the way no more "I haven't build my house yet"
Instanced housing will never be the answer. Instanced housing would just be bigger apartments, and people don't want that. They want the community aspect of a neighborhood.