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One of the big draws is being able to play maxed out 16 player games as a group. Ideally, everyone would be able to cover their own equipment, their own console and display of choice, but there are limits.
Some people travel from far, far away and bringing their electronics is not feasible.
Space is a commodity. Having space for 16+ people alone is a challenge, but space AND power for the tech? Even more challenging.
Then there is the spiritual aspect of it all. For many years we've all watched gaming change from an activity you could do on a couch on one TV with a few friends to a more solitary experience.
"Hey man come over and lets play some Halo!"
"Nah I don't want to get all my stuff. Just hop on live"
Having a LAN is\was a great way to re-experience that classic feeling with your buds in person.
Sign of the times, I suppose.
I don't like it, but lets face it, we're a niche. People don't want to play like that anymore, it's just too much work.