I faced terrible lag this weekend. Whether it was lag switching or poor servers is anyone's guess. I can say that I learn towards individuals cheating. The reason is as follows.
Let's take a look at the logic. Bungie has no interest in having poor servers. What sense would it make for Bungie to cut costs on hardware? Shitty servers would make people want to play this game less than they already do. Less people playing =less income. I think the issue has to do with bandwith, or yes, cheaters. Take a look at an average IB matchup. There are 12 people. There can very possibly be 12 people from different parts of the world with different connection speeds. I don't have the best technical knowledge with all this stuff, but it seems that may have a lot to do with it. However, it has been easier to cheat with online matchmaking games as it ever has been before. People can download applications to their phone which will in effect make a lag switch.
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This game does not use servers. But yes the netcode is so garbage.