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Alderxian said:

The servers went down because they were switching from the Halo 3 servers to the more powerful Reach servers, like they did with Halo 2 before Halo 3's release.

Source: http://www.bungie.net/News/Blog.aspx?mode=news#cid27250

As for how many people were playing, maybe you were playing on Bungie's day [7/7] where everyone had flaming armor for one day.

Ok that makes sense. The new servers seem to be way way better then the old ones...my uncle was downloading something and was taking up 90% of the bandwidth and I could still play Halo without it lagging hardly at all.

Oh and I was playing on the 10th.

But it seems to me the numbers weren't correct because all last night there were only about 14k people online and its never that low.