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Take WOW as an example. What are the pve gameplay? Solo-quest, 5-man instanced dungeons and raids. In between dungeons, players waited in a city.
So what if there is no virtual world? Just a city lobby. Will they even notice the difference?
You may say .. what about meeting other players when you solo quest? Well, that also don't need a persistent virtual world. You can use an instanced and match random players into it. You will never be seeing 10000 others outside of a city anyway. In fact, most questing players won't want 10000 others to share their quest mobs.
In DDO, most of the gameplay is in the dungeons. There isn't much of even the open world solo-questing like in WOW.
LOTRO is similar to WOW.
In STO, most mission/pve content is in instanced. I do see lots of other players (space ships) in sector space. However, i doubt i would even notice if the sector space is not persistent, or if some of the space ships are NPCs (in fact, some of them are).
In fact, didn't GW1 tried this idea and was very successful.