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Ghost Realm
How about creating "ghost realm"? Any player inactive for say 45 days "dies" and is sent to the archives so as to make room in the active realms. If the player eventually logs back on they would have the option of re-animating that toon or creating a new one. That would clear out the "dead wood" and make room for active players. Also during reactivation they could change some characteristics and the realm they reappear in.
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I do not understand what you mean by making room in the active realms. There is no limit as to how many players can be in a realm. What I would like to see is an indicator on the rankings for players that have not logged on for 60 days. It would be a good indicator of inactive players and will give us a better idea as to how healthy the server/realm is. The same for Guilds where no one has logged of for 60 days in the Guilds ranking tab.