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if you're hosting on the player server then yeah your CPU has to be a monster to keep up with you and what your buddy is doing. i noticed the CPU problem with paid hosting companies too. they all share the CPU with another player's server and it can't handle it.
my buddy hosted our game on his old windows 7 laptop and it ran better than the paid hosting companies. but that's the trick. for this game to run at its' best, it needs to be hosted on a PC that is DEDICATED 100% to hosting that game. not 2 games at once and not hosting from the PC you are playing from.
so if you go to a paid server with this game expect problems. you're better off getting the steam server and using steam CMD and hosting it yourself on a PC that's not doing anything else. anything shy of that will bring lag and long loading screens once you're past day 100 and big base build, etc.
this game isn't bottle-necking on RAM so much as on CPU. i dunno what all the devs got going in that main loop but it's a lot apparently.
when i was paying for hosting for this game i watched the stats a lot. seems like this game wants 8 GM RAM to run so as long as you got that free you should be OK. the more you play though the more RAM gets eaten. you gotta just reboot the PC once in awhile to fix that. also, when more players join the game, you'll need more RAM and CPU of course. but even when we had 6 people on the server it still didn't go above 8 GB RAM that much.
but the CPU problem is hard to address. i mean at least until 10 years from now when CPU running 4x faster than they are now. :/
but the point i wanted to make is that the PC should only be used for Steam CMD and nothing else while hosting the game (for the best gameplay experience)
also, as for CPU, i mean, you don't need the best to play but the best CPU will have the game running smoother.
i play on a AMD FX 6300 :p
and i lag a lot, bad FPS all the time, real bad in multiplayer. but still i played for 9,000 hours like that.
but yes if you run steam CMD on a PC you can have multiple people join it and play. like i said my buddy ran this game on his old windows 7 laptop and it ran fine so you don't need a monster CPU for the server just for your client-side (the players).