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1. You need a system that can actually rank the good players from the bad ones.
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This has historically been done with qualifiers. However, qualifiers would need to be implemented such that they take course over a longer period of time than an hour or two due to the size of the server population.
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2. A lag cap, first and foremost. No laggers/delayers allowed to keep it fair.
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This needs to be done for all competitive sparring.
These already exist from previous iterations of singles spar tournaments. In fact, PC Classic still uses the spar tournament levels I tiled.
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4. Staff that can summon correctly.
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There are really problems with this?
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5. A server that can handle the lagfest. Would be nice if only the players that are participating can connect to the server, meanwhile everyone else can watch the event on twitch or some other livestreaming site.
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Hide all players except the sparrers in the spar tournament levels.
Yep.