Death Systems for Persistent Worlds
Death in a pen and paper or small-group setting is relatively easy to handle, assuming the GM has decent judgment. Death can be cheated any number of ways through GM fudging, and the death of a character can remain an epic, traumatic event, in a way that is apropos to the story being told. In the MMORPG world, however, the consequences of death are harder to deal with. On the one hand, you want there to be consequences for death, or it becomes meaningless, and you have people routinely making suicide charges for XP or jumping from lighthouses when they get bored. On the other hand, dying in an MMORPG can be due to any number of stupid reasons, most usually lag or a badly timed disconnect. Losing all of one’s possessions and possibly the character itself due to chronic router failure is frustrating to the point of cancellation, and more importantly, destroys the immersive quality of the game. Nothing can be done to prevent technical failure 100% of the time, but this should not be a reason to make death completely meaningless.
In order to give some weight to combat activities, it must be dangerous somehow. In real life, the danger factor is obvious: everyone reacts to physical pain, and people generally have an aversion to death. In a pen and paper RPG, the danger is in losing a character that the player has an attachment to and a certain emotional investment in. In an MMORPG, death penalties are generally limited to a loss of some/all equipment and possibly some form of experience penalty. Please keep in mind that when devising a system for death penalties in an MMORPG, the primary goal is not to stop players from whining, as they will do that anyway. Yes you want to prevent people from becoming so frustrated that they cancel their subscriptions the first time they lag out in battle, but the primary goal is to devise a system whereby there is a reasonable level of risk attached to reckless, suicidal actions.
Permadeath is a tricky issue for MMORPG’s. The loss of a character can be traumatic for sure, but this makes it an effective deterrent to acting like a nincompoop. It also carries a few other interesting benefits: the permadeath of a character can be used by a sufficiently advanced roleplaying subcommunity to expand the player-based lore of the game, it reduces the resale allure of characters via eBay (after the first few people buy an expensive account then get the character killed forever because they don’t know how to play it), and it slows down the inevitable process of everyone reaching maximum potential in your world, thereby helping to maintain a more or less stable power pyramid from lowbies to ubers.
A compromise system, involving a limited number of resurrections before permadeath, could possibly work. A theoretical system Shadwolf and I worked out involved resurrections being performed by a house of worship of the character’s faith (which incidentally increases the value of religion in the campaign to something more than "useless lore"). A character might have, say, 5 resurrections at the start of play. More resurrections could be earned by the character through devout service to the temple, religious questing, being a local hero, whatever, and would slowly regenerate automatically if the character was below 5 remaining resurrections. In this way, a character still has every chance to avoid permadeath unless he is involved in something very stupid or very heroic indeed, and if a player dies to lag 4 times in a short period of time, he should really be thinking about waiting for better conditions before playing anyway. Couple this system with temporary weakening and reasonable equipment loss, and now death is still something to think about, but you avoid the "killer dungeon" aspect of bad campaigns.
Permadeath can be further eased by the following method: On the permanent death of a character, after the big cutscene has ended, the player goes back to the character selection screen, where the name of the dead character is listed along with an indicator that he is dead. Choosing this slot now gives the character 2 options for a replacement character: either a newbie from scratch, or a "relative" of the old character, with the option of a new first name only. The new character has an appearance very similar to the deceased’s, the same surname, and abilities based on those of the old character, maybe roughly equivalent to the dead character’s power total over the starting base divided by 3. The old guy might be dead, but his brother/son/second cousin is there to reclaim the family honor! This is also a possible method for dealing with death/retirement by aging in a game, and assuming your game lasts long enough to cycle through enough game-years, one player can potentially write the family history of an entire line of adventurers. In such an aging game, the replacement character might have a power total bonus equal to the old character’s divided by 2 instead of 3, as a little perk to a player who has managed to avoid getting his old character killed stupidly.