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I like the idea of less XP per kill and much large groupings of MOBs.
Statesman said 1 hero = 3 minons
How about that scales based on level.
L01-10: 1 Hero = 3 minions
L11-20: 1 Hero = 6 minions
L21-25: 1 Hero = 9 minons
L25-30: 1 Hero = 12 minons
L31-35: 1 Hero = 15 minions
L36-40: 1 Hero = 20 minions
L41-45: 1 Hero = 25 minons
L46-50: 1 Hero = 30 minons
XP rewards could be adjusted accordingly, based on the assumtion. That way herding 100 minions for a 3 Hero team isn't too far off the mark. Besides, I love being able to eliminate 10-15 Crey solo at L30.
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That is an even worse suggestion for classes that cannot take on large groups.
The Original Poster's suggestion is good. But then you will end up with people firing a couple single target shots at a group then Alpha Striking it.
Given a 3 to 1 ratio, maybe adding a curve in so that as the ratio increases the damage capacity for the villains increases along with their defence. A large group will then be harder to AoE to oblivion since it will be harder for the AoE to effect every single target. Also, since you have a better spread of firepower, their accuracy would increase.
This would mean that larger groups would be buffed by their sheer size to hit more frequently and take less AoE damage. Also, for the ratio to scale properly, all teammates would need to be within the same proximity to that group (like the SK radius with a briefer grace period). That way you don't end up with 5 Soloers teaming up to solo and negate the buff by exploiting the group ratios.
I think the suggestion is in general.