No, the problem isn't loot or level cap or anything like that. Even on a classic level 50 capped server, you'd see people preferring to solo/duo if they are the OP classes (necro, mage).
The problem is that there isn't a big exp modifier to grouping in classic EQ. Hence why people prefer smaller groups. In POP they went too extreme the other way, making anything but 6 man groups vastly inferior exp.
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