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One thing that would help server load would be implementing an "AFK" kicker that automatically logs a character out after being AFK for over 30 minutes. Currently there are numerous characters that AFK overnight or during work/school so they don't have to log in again.
Perhaps add in the next patch or so?
As it's been said before, it seems 1017 isn't being caused by the servers being physically full - There's something else going on with instances and stability that required them to restrict log ins. Sounds like every server is only operating at about 1/3 capacity at the moment
ontop of that allot of people are just sitting in town waiting on a duty to finally unbug and go thru and que up.. u know how mad that would make ppl if they get kicked after a half hr when most of the time it is taking more then that to finally get in a dungeon? horrid i mean me myself theres been times when no other quests and in a area where fates dont pop much and im waiting for a duty quest to finally que up and i'll flip on the tv while keeping a eye on the game waiting or read a magazine or check my mail on my phone ect ect
This sounds like a good idea in theory, but there is pretty much a infinite numbers of ways to get around a "auto AFK kicker system". so the same people who never log out currently will never logout with the proposed system.
Also like Cyanide mentioned, there is more to it all, then to many people logged in to any given server.
Although there are ways around AFK checkers, implementing an AFK kick WOULD reduce the load on the servers. The vast minority of people actually bother to use these workarounds.