The problem is that the current average playerbase is down due to current downtime, on top of being restricted on who gets it. This creates a very low average Server I/O load on resources, and by the very fact it's restricted to a theoretical finite cap even in the worst case, it can be handled accordingly - this is also the extremely likely reason they're intensely stingy on simply adding more wards, as you have to understand how much additional average Server I/O load you're going to be adding and make sure your system can handle it.
Made even more doubly so by the fact that by nature of them being more unattractive options, Apartments on any given day will contribute very little to the expected load, to the point they're a nothing burger in general load balancing.
Tear open the gates to full instanced housing, and the server I/O on the content on any given day will shoot into the stratosphere compared to what it is now. Considering that the instance limit for housing was hit extremely easy for huge swathes of the day (during the first 2 weeks ish I could only get into my home during what was practically work hours, and good luck on weekends outside dead hours) during EW's launch, and then again easily hit almost immediately by every server when IS launched, it's pretty apparent the instance cap is on the low end. Even post initial launch and hype, I have no doubts the system would fall apart quickly and suffer from problems on the daily.
Having worked with server systems for several AAA games, I can pretty much guarantee you it's a server power - if they were profit driven, they would have implemented Instance Housing long ago due to it creating more player retention, thus more potentiality to mogstation purchases/mogstation interaction where their real profit margins lie. Even more especially when Square Enix & Yoshi-P have themselves have constantly alluded to lack of server equipment constantly throughout the years due to how vicious the microchip shortage has been on acquiring server hardware in the industry in general (one of my previous workmates at Ubisoft loves to tell me they're still waiting on hardware orders from 2021) - it's extremely obvious to my own dev experience they have a system that simply cannot scale, and the current ward additions are basically as much as they can do for the time being with the resources they have.
There's also the simple fact that they currently have 4 regions, and enough server equipment has to be bought, installed, and of sufficient quality to actually handle the solution. They could acquire all the tech they need to implement Instanced Housing on NA, but it'd be irrelevant - unless they can implement the solution in all regions simultaneously, there will be massive complaints.
Every sign both on a technical level mindset and a business mindset point to there being a technical chokehold, nothing out of malice, ignorance or the like. It also explains their sudden interest in cloud data technologies when there's old Shadowbringers era interviews saying they had little interest in it - not even just for housing, but plenty of other systems that have gotten chokeholded in recent expansions (solo instances, The lobby server, etc) can benefit immensely from cloud server providing dynamic scalability without the need to proccure that scarce, expensive hardware.



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