This wont work at all.
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Match making based on the unranked elo of the lobby will just result in a ranked queue with a different ladder. This ladder will always be less accurate than ranked. So in my eyes it has no benefit over the current ranked system.
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If we add a match making system based on no elo at all, then we end up with quick play. There is a good reason why quick play isnt popular. You only end up with unbalanced games. I know this thread was made before quick play was a thing, so @ProkmanI didnt knew this feature. Quick play in the current form is a disaster. I made my own thread about that subject already:
Completely deleting the lobby in favor of somethings else also seems a bad idea. There are some games that will always be played in the lobby. Some examples:
- Tournaments games
- Games with friend only (Example: LAN party)
- Some niches that dont really fit into match making