This game is created by blazeingyoshi (you might have seen him around the forums too) with the help from a few other great persons that are mentioned on the website. The engine it uses is Eclipse Stable which shows it is a MMORPG. Now, before you jump to anything like "oh another mario online clone" or something like that here are some details about the game:

MLO is meant to be an original fangame since it is made from 2 dimensions: the first one takes place in the Pokemon world which will surely bring memories of another Mario MMORPG, and the second one will be a whole new story. About the first dimension, you may actually think that MLO is what SMO should have been..instead of how it has been brought at this day by a certain guy (not gonna mention his name while I'm alive anymore).

The game contains:
~1. 6 Playable areas so far(Including the towns)

~2. Turn Based battle system(Jus like PMO's battle system :p) with less bugs and the block timing

~3. Lots of characters to play as! (More to come! request playable characters you want to be as! (must be in the Sprite sheet, which is found in the GFX folder!)

~4 Equipable items, badges, armor, weapons!

~5. Specials! Blazeing made specials for each class thats been made! 2 Tiers Specials are available!

~6. Party! Join and help other friends in battles! You will not be forced to battle, because there is a option where you can join or decline!

~7. Boss battles! Battle bosses to recieve rare items!

~8. [?] Item Blocks [?]! Recieve items from them! You'll never know what you'll get!

~9. Trade with other players! need a item that a friend already has? Trade with them by command /trade <playernamehere>

~10. Guilds! Have friends in your club/guild and communicate with them by saying @<msghere>

~11. Quests! Complete quests and gain items and EXP!

~12. PvP with other players in PvP maps! 1 available so far!

~13. Minigames! BlazeingYoshi and Nesskater are working on a Maze Minigame At the moment! Much more to come!

~14. Game Over Screen!

~15. New Level Up Screen!

~16. New HUD!

~17. PvP Msg, and PvP Symbol when in PvP Map!

18. New trade!

~19. New guild menu!

20. New Private Message

~21. Currency items are auto pickup.

~22. New Music!

The game's plot:
The game's plot is taking place around more dimensions than just one which explains why some areas may not look Mario-ish at all.
The Pokemon Dimension
You start off in this dimension after a battle with Bowser in the Mushroom Kingdom (taken from the old tutorial area that may make a return). You have a dream that leads you to Bowser (in the current MLO version) and after the battle you wake up in Evergreen. The chapters in this dimension take place around Mystic Ruins, Dry Dry Desert, Bandit Woods, Dungeon of Relics, Noki Island, Snow Peak, Shrine Volcano and Sunrise Village...which prove that the first dimension is based of SMO. A certain chapter would make you ask yourselves question that can be answered in a quest for a really epic item.

The Mushroom Kingdom
That's right, after you finish the first dimension you will return to your home dimension. Not much is known about this dimension yet but you'll notice it will look chaotic because all of the heroes including you have been sent in the other dimension. Fixing what is causing the chaos should let you explore the Mushroom Kingdom in its normal way...but who's to say the game ends here?

Hyrule
There may be a possibility this would be the third dimension of the game.

The Void
It may be just a place for a quest playable for those who have the Dual Swords, level 90 and are on chapter 8 that lets them to get the Dark Dual Swords, this dimension is a dimension gathering other insignificant ones..which will explain the way the areas look like. You'll find your answers regarding the events in chapter 4 in this dimension as well...but would also raise other questions: Dark Matter, the boss of the Dark Dual Swords quest, is just a spawn of darkness or was it created by someone else?

For more information about the game or the staff as well as the download link you can visit the MLO website:
http://www.wix.com/blazeing/projectmlo#!

-If you see any bugs try to report them as soon as possible-

The game's trailer:

I wonder what the deal with these games is.

A mystery that will always remain unknown.

Not to me:
The games are exiting and a facinating way to get insulted by moderators calling people n00bs.

Kidding, these games are spectacularly designed and usually have some twist where the horrendous plot thickens into a stupendous world filled with combat and friendship.

I thought the reason was the lack of official Mario games for PC.

Anyway chapter 4 will be released pretty soon.

Hmm... I am currently pondering...
I possibly will join despite the fact that its not done.
I will try my most to make my experience satisfactory for other players depending how many there are.

Also, are you recieving suggestions for equipperment?

It's gonna stay alive in development don't worry. As for the equipment suggestions, ask blaze.

Okay,
and when I attempted at joining then I logged in...
The game froze at the ScreenPlaceHolder screen.

I don't mean to double post but can ya please help me with this MasterMario97?
I've tried all of the Eclipse Library Installers and nothing gets me past that Background Place Holder loading screen of terror thing

I really wanna play the game

Try redownloading the game. Not many have encountered that problem so I don't have any knowledge about it. Ask blaze if you see him on the website.