I don't see how it's really any different from any other MMO... you don't need 99 people in a room, nor would it be productive.
Well, the point of an MMOFPS would be to recreate large scale PVP battles. If you're just doing "raids", might as well play CoD4 singleplayer... and if you're just doing small scale battles like they're planning with Resistance 2, you might as well just play any other FPS with a squad system, like BF:BC.
I have a feeling that MAG isn't going to be that game's final name (I've even heard rumors it's a Socom spinoff).
To be fair PS3 games use dedicated servers far more often then Xbox games do, so I'm willing to bet they will be able to pull off 100 players with dedicated servers.
Communication can be an issue, though I imagine if handled correctly it will work. Only allow people near you be able to hear you (and if it's a squad based game also allow people to talk to their squad, and squad leaders be able to talk to each other). Of course games should always include private friends channels to allow friends to talk to each other without anyone else interrupting.
Yeah, MAG is definitely a temp name. And yep, the good thing about PS3 games is the dedicated servers. Still, I'll have to see it to believe it. 100 on the PC is still a rare sight.
I suppose the argument there is that after a certain number, chaos ensues. I think 64 works with Battlefield because of the large maps, but unfortunately most console FPS players like playing in tiny boxes.
One problem with multi-channel chat is that the 360 control is already running out of buttons. You'd need a button to toggle between squad level and command level chat and even then, you'd need people to actually listen to each other in the first place.