We've had this discussion before many, many times.
Here's a quote from Mark Rubin of Infinity Ward that touches on the idea opinion and thoughts I have on this situation. Sources and link will be provided below.
Please note that this article is a year old.
According to Rubin:
It’s easy for someone to say, ‘I want servers on console’. I don’t think everyone understands exactly what they are asking for. What that would mean, would be opening up data centers in every single city across the world because this is such a huge game of 30 million plus people. We have more than 33 million people playing Modern Warfare 2 all over the world and even more play Black Ops.
There is a statistic which states that one in every four households in the UK own a version of Modern Warfare 2. Similarly, one in eight households owns a copy of Black Ops in the United States and sales in this region broke 13.7 million copies at the beginning of March, 2011. Rubin provided even more detail about the situation which really put things in perspective.
So now we have to open up data centers in every city in the world, that has severs. And we are not talking five or six severs, and we aren’t even talking ten to twenty servers. We are talking about more severs than all of World of Warcraft in every little data station. Each one can only have three to four games on it at a time, at most. It just becomes this nightmare of trying to spend four billion dollars on trying to create a server structure.
If we were a small game, servers on console might be something more achievable. We might be able to do a west coast server, central server and east coast server and that might be fine. But for us, if we actually did that, if I put a server in each region and you are somewhere in between you are going to connect to that sever and have horrible latency. In our game latency is important and you should be matchmaking with people close to you. So the actual thing here is that our style on console works better than dedicated servers from a latency standpoint. We know this is true; we have tested it from a numbers standpoint. The reality is that people think that is what they want, but they don’t understand the actual challenges.
Source: Dedicated Servers for console, Spawn System, Knifing, and more.
Site: Digital Warfare 24/7
As I said, that touches on my opinion. It would be expensive and would put some players at a disadvantage depending on how far away from the dedicated server they are.
Here's a quote from Vonderhaar. Please note that this is two years old.
Hi,
Please read: http://en.wikipedia.org/wiki/Game_server
Call of Duty 1, Call of Duty 2, Call of Duty: Big Red One, Modern Warfare 1, World at War, Modern Warfare 2, and Black Ops are all Listen Servers (for consoles) and not Peer to Peer topologies.
The only truly peer to peer game (using a literal definition) in the franchise was Call of Duty 3.
This can never be "fixed" because of this little thing called the "Internet" and how it works.
What we can and try to do is:
-minimize the upstream bandwidth required to play
-use the best networking prediction we can
-continue to have the Local Search only option
-improve the algorithm for how we choose the host
-continue to work with Microsoft on how they do Matchmaking
...among other things.
The common assumption that Dedicated Servers (instead of Listen Servers) will somehow solve all problems is not accurate. It's grossly over-stated as a cure-all. It causes new and different problems.
What many people don't understand is that (on the 360) you have to bounce and authentic all "Live" traffic through what is known as the xLSP gateway/proxy. In the simplest sense, it's a type of Virtual Private Network (VPN) between us and Microsoft.
All of the World at War stat servers (for example) run behind one. So does the infastucture telling you how may players are online; or the machine you get the Playlist from (etc, etc).
Reporting stats to a database server is one thing; sending game traffic through the gateway/proxy is an entirely different beast which will increase latency.
xLSP has policy guidelines and restrictions. The bottom line is that it both lets us offer a lot of stuff to you that Live itself doesn't offer (or has made generic to work with "any game" whereas we want to do something that works awesome for Call of Duty), but it doesn't exactly give us complete flexibility to do whatever we want either.
In Summary:
The game is not Peer to Peer.
Listen Servers, Dedicated Servers, and Peer to Peer games can never be truly "fixed." They can just be designed and developed to work better on the Internet.
Dedicated servers (for consoles) are not a cure-all.
We are MP developers and gamers, thus aware of what it is like to play MP games on the Internet. Including this one.
David 'Vahn' Vonderhaar
Source: Original Post
Just posting all of this for the sake of discussion.