I think it has everything to do with lack of dedicated servers. This old school shit has [i][b]always[/b][/i] created this problem.
One player's console in each match is selected to be the 'host' and all other players data goes to and from that host machine, which handles synchronizing the actions of all players - like running, jumping, shooting, and dying.
The 'host' has an advantage in that that player experiences zero lag - it's his or her machine that the match is essentially taking place on. Everyone else . . . depending on distance and numerous other factors . . . they experience lag to various degrees. Sometimes unnoticeable, sometimes game breaking.
This is why skill based match making is so problematic - it looks for people in close proximity to each other, to help minimize lag, but filters it to account for level of skill, which means lots of matches with players considerably further away from each other - which equals more lag and broken games.
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