There needs to be a significant advantage to grouping, but I don't think you should have to group to do anything. For me, that was the worst thing about FFXI. Sometimes I don't have four hours to dedicate to a group. The death penalty was also too extreme in FFXI. It kept people from trying new things and experimenting. That is bad in a game. You want people trying new things. If you are going to lose 3 hours of work for trying something different, even if it turns out that it would have been more effective, no one will do it.
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