Again, there are no "Servers". There are Hosts. The one dude with the full green connection you see in every match? That's the host. For all intents and purposes he is the hub, the main gateway, the linchpin, the One, he is the point everything goes through, the one that's "hosting" (I don't have another way to say this, I'm sorry) the game. And yes, if you have to, call him a server. For that game, his Xbox is the Server. He is the Host. His Box is the Server. Hosts usually change, sometimes every game, sometimes if the program thinks for whatever reason the Host is good, he or she may be host several times in a row. Supposedly the game will try to find a server that is the closest to everyone in the lobby, like the lowest common denominator, distance wise. But sadly that doesn't really happen.
But there are NO DEDICATED SERVERS. Which means there are no computer banks strategically located around the globe that will automatically function as hosts for Crysis 2 games, so that people can get the best ping possible with no one server being too far away from any one player for decent performance.
As to the locale settings of your Xbox, the game utilizes those settings as a pre-screening measure, a filter to try and put you together with other gamers from the same locale. So in a perfect case (for you) all people in the lobby are from Germany, which means that no matter who of those players will be the host and function as the server, since they are all geographically close enough to each other, it would guarantee low ping times, good connections and therefore lag-free gaming. So if you're looking for the best connections to other people (There is no Server, only people which are hosts), keep the locale on where you actually are, or at least as close to where you are as you think fit.
The reason why people seemingly get more games or better connections by choosing a locale that is not actually theirs, is simply a matter of population. As far as I can tell, the most people still playing are in the US. If I change my locale to the US (which I did, once) I get into games immediately, but because the people are all from the US, and therefore the host of my game (There is no Server) is about 3000 miles away from me, I have a bad connection, and thus lag.
Now, I shouldn't make much of a difference for the connection if you put in the UK, or Holland instead of Germany, except maybe for the spoken languages; in the same way, it doesn't really matter if you put it to the US but actually live in Canada. It's just a matter of where people are playing the game and what their consoles tell the game where they are.
It works like this:
Locale: Germany
Actual place of residence: Germany
Lobby searching for people:
1. with the same locale (Germany)
if it can't find any, or not enough, after some time (60 seconds I think) it will go to search for people
2. with a close locale to Germany, meaning basically Europe
and if that doesn't work out, it will go to ever increasing distances and search for people
3. spiraling outward distance wise from your locale until a lobby is found with people to play with.
The locale is a filter. It tells the game "Hey, I'm in Germany. Please try to find people that are as close to me as possible first, because, you know there are no dedicated servers, so some other Crysis 2 playing dude and his Xbox will be the host, so the closer we are together, the better the connection will be".
If you want to improve your connection and or ping, try shutting down everything else that might use your connection, computers, laptops, TV, everything. Even Anti-Virus Scanners on a PC that shares the same connection can decrease your speed.
And, once more, so that all will know:
There are no Servers.
But where are the servers?
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