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Wouldn't it be a great experience for the community? I mean is the amount of players really that crucial that it outweighs everything? Does having everyone able to participate affect them negatively? And why should the wants of a few outweigh all the players that want to participate in competitions?
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Hmm, I don't really know how to explain it.
I'm going to make up numbers here, so please forgive me.
You have one thousand members in a community of varying degrees of talent--some fantastic talent, some not so fantastic talent. You start doing tasks like this and release a forums, and it becomes a bit chaotic. A lot of the work isn't very good, and it's hard for the organization to be controlled because of the tons of members producing extremely different content. It's so chaotic, and now the hundreds of entries for every contest just get a "yeah, nice" or a "decent" comment from the leaders of the organization. Nobody's really getting anything out of it anymore. They improve, but solely on a personal basis. There's so many members that it's crazy for everybody and isn't as fun or useful.
Now, then you have the Initiative with twenty members (random number, sorry). These members have proven to be talented and are dedicated to working with one another to even further their talent. Because of the general skill and smaller population, everybody is able to interact better. People get to know everybody instead of just forming their own groups of friends within the organization. The members get plenty of tips from each other, and the leaders will be able to spend more time helping all the members. It's good for all the members.
Is the first one better than the second one? Depends who you ask. The first one is okay for 980 members of Graal, but the second one is extremely good for 20 members of Graal. The bottom line, however, is that both are completely different. The Initiative is not the first and so it's silly to try to change the second into the first because, well, that's not what it was made for. A different organization could fill that niche, but not the Initiative. Not because it isn't capable of it but because that's just not what it is.