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When a system finally exists that can support adding new mobs, new items and new areas into a MMORPG 'and' running it as a stand alone server, we 'might' see it effecting the MUD scene, but more as a transition. Otherwise, I have seen people drop off 'temporarilly', but most come back. Eventually it might happen, but its will take someone to make a free/cheap server and free/cheap client, which support 'true' world development, as well as the bandwidth to support both ends in everyones hands, without huge outputs of money to use them and support the server. Right now, the expense of running one makes running a free one impractical, the engines are good, but not flexible enough, even if provided to everyone that wants one, to compete, etc.
Text so far remains the most flexible, even if sometimes the lack of graphics is a matter of extreme frustration. If it takes 1000 words to destribe something, then sometimes it 'does' require a picture to manage it, rather than send the players running from 5+ pages of text. The only alternative is to 'hope' they imagine what you intended. This is rarely the case, as anyone that spent days trying to figure out the syntax to what should have been a simple puzzle, due to misreading something or flat out not thinking like the wizard, can attest to.
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