The Death Penalty Mechanic and Loss Aversion in MMO Design

For many years I have been on a mission to unlock the elusive code that made EverQuest so great. There is no single equation that accurately explains the magic of the EQ experience. The brilliant design of that MMORPG released in 1999 is a combination of many ingredients. In every culinary recipe, greatness or mediocrity is but a few degrees of difference of ingredient quantity and of skill of preparation. The same was true of EQ.

Some of the best design ingredients of EQ were the following:

  • traditional RPG experience based level advancement system
  • promotion of player freedom via unstructured gameplay with no imposed narratives or story arcs
  • traditional and diverse RPG class system which emphasized class interdependency and required most classes to group which created a deep social experience
  • well tuned PVE combat via melee and spell abilities that rewarded highly skilled players and encouraged emergent gameplay
  • death penalty mechanic which introduced serious consequences into the land of Norrath

Most of those ingredients were very popular with players because they offered players the autonomy to gain things and improve their status with other players. The final ingredient – the death penalty mechanic — wasn’t about gain, it was about loss. By including this feature they leveraged — either knowingly or perhaps unknowingly — the powerful concept of loss aversion. Here’s a short definition of loss aversion:

It is thought that the pain of losing is psychologically about twice as powerful as the pleasure of gaining…

A good example to illustrate this is the following: given a choice, an average person would be two times more motivated to prevent the loss of $100 then he would if given the chance to gain $100. Most studies have shown that losing is actually 2.3 times more powerful than gaining and others have shown it to be 5 times more powerful.

There’s a relatively common expression that speaks to the concept of loss aversion: loss looms larger than gains. In the human mind, we are more apt to focus on a potential loss than a potential gain. We want to protect what we have and what we have worked for. This trait is a big part of the human experience and probably helps to explain why we have survived and prospered as a species in a dangerous and hostile world.

Loss Aversion in MMORPGs

Probably the best example of loss aversion in MMOs is the daily quest. The daily quest was invented by Blizzard and introduced in patch 2.3 in their Burning Crusade expansion. A daily quest was a repeatable quest that was only offered to a player once every 24 hours. Each day at some point the daily timer would reset and players would be able to complete the quest again.

As daily quests become part of the MMO landscape, many players felt compelled to log on and complete their daily quests because if they did not, they would “lose” the opportunity to gain reputation, experience and money. If a player failed to log on that day, there is no way they could ever recoup that loss.

At one point, Blizzard created a 10 daily quest limit. So players would log on, complete all 10 daily quests and log off feeling that they had gotten their money’s worth from their WoW subscription. Many players including myself felt that daily quests were manipulative as the daily quests were repetitive and not that fun after doing them for the 100th time. Despite their manipulative nature, daily quests gave players a reason to log on each and every day and ultimately kept them subscribing.

Another example of loss aversion are when certain items come up for sale in micro-transaction shops in free to play MMOs and subscription MMOs. Almost every week there are rare mounts and costumes that are for sale in WoW and  Elder Scrolls Online cash shops that are only available for a limited time only. Some players feel that must buy these items or they may never seem them again. In fact Zenimax is banking on it. This is a combination of loss aversion and scarcity — both powerful human psychological motivators that are useful to leverage in MMO design.

The desire for players to want to drop what they are doing and participate in live GM events and quests is another example of the principle of loss aversion at work. As a Senior Guide in EverQuest I can personally attest to this phenomenon. Once the world got out that GMs and Guides were running a quest, hundreds of players would find their way to the zones and try to be a part of the event or at least witness it unfold. These events were special and rarer then a named mob being triggered in the normal course of gameplay and offered a unique shared social experience that players would talk about for years.

Players were drawn to the events because they didn’t want to lose out on the opportunity to 1) get some ultra-rare loot and 2) to be part of a rare communal and social event. More loss aversion at work.

Deep Loss Aversion

It is perfectly natural and instinctive to view an average player’s motivation to play a MMORPG to be about gain via mechanics that promote advancement. But the truth is that loss aversion is a far more powerful and less known motivator that explains why some MMORPGs offer a richer and more compelling experience than others. Most MMO studios have failed to identify and leverage this deep seated truth about what motivates us as humans and the results are virtual worlds that lack believability, excitement and immediacy.

Before we delve into this deeper, I need to set the stage and examine the way players experience loss in a virtual world. It is the last and most controversial ingredient in the EQ magic formula and it’s what happens to players in a virtual world when they die and after they die — it’s the death penalty mechanic.

The TL; DR version of this article is this: When death is painful, MMO players hate dying and will do all they can to avoid and mitigate it. MMO designers since World of Warcraft have largely failed to understand and leverage this powerful human tendency to avoid loss. When dying becomes trivial and rewards dwarf any form of risk, the MMO player experience is greatly diminished.

The Death Penalty Mechanic

For years now in the majority of video games, you would assume the role of a character and engage in combat with monsters. If your hit points went to zero you died. Typically, your character would re-materialize at the beginning of the level or when you saved the game or at some pre-determined milestone you had completed. Each player would have a certain predetermined amount of lives.  You would lose a life each time your character died in battle. When you ran out of lives the game was over. Basically, this was permadeath.


In MUDs and the MMORPGs that came after, death worked very differently. You would never die permanently in an MMORPG because you can always run back to your corpse after you die or get a resurrection by another player. Existence in a virtual world is eternal unless you choose to delete your character.

Over the years as MMOs became trivialized due to concerns that barriers should be reduced to bring in more subscribers (the Blizzard philosophy), some former EQ players unhappy with the state of MMOs started to look at the death penalty and wondered if it was part of the reason for EQ’s success.  In retrospect, we felt that the death penalty was one such feature that made living in Norrath feel very real and it helped to create a sense of palpable danger and gripping immediacy that no other video game has ever managed to produce. We intuitively felt that it was somehow important but we really didn’t understand why.

In EQ when your character died, the death penalty you experienced was the following:

  • you are teleported to your bind port and you are naked without any gear
  • you lose a significant amount of experience which may cause your character a loss of level and abilities which can be recouped with further adventuring
  • your spells need to be re-memorized
  • you must travel back to the location — often a perilous journey — where you died to retrieve the gear, items and money from your corpse

If you died and you were resurrected by another player such as a cleric you would gain back varying amounts of lost experience and your stats, mana and stamina would be drastically lowered while you recovered. This recovery process would usually take about 10 minutes. It was dubbed Resurrection Sickness.

Risk versus Reward and the Importance of Death

For years MMO designers have exhorted the virtues of risk versus reward. Another way of looking at it is the concept of return on investment. As humans, we continually evaluate risk versus reward and return on investment in our daily lives. Most of us seek to maximize the reward while minimizing the risk. We strive to work in jobs that pay us the most amount of money for the least amount of effort.

When we play MMOs, this natural process of evaluation continues. When a MMO designer puts crappy loot in a dangerous dungeon where there’s a high probability of death, players eventually find out and avoid the dungeon. Players vote with their feet.

The risk that a player is exposed to in a MMO is:

  • the risk of dying with all its associated inconveniences
  • the risk of wasting time incurred traveling to an outdoor location or dungeon
  • the risk of wasting the time expended waiting for rare loot to drop
  • the risk of losing your social status and reputation for failing to fulfill your duties to your group by dying

While I don’t want this article to get sidetracked on the discussion return on investment, it’s still something that needs to be mentioned.

The risk of death in a MMO is a special kind of risk. Death can find you anywhere in a virtual world. You can fall off a cliff and die. You can enter a dangerous area and die. You can be ambushed by hidden NPCs. In a good virtual world, death is lurking everywhere. The possibility and ramifications of death bring much-needed feelings of fear, loathing and terror that help to create the tension and excitement that keeps a player on their toes.

If a death penalty is trivial then risk itself is trivial. Yet death in 99% of MMOs is a mere inconvenience and speed bump — you don’t lose experience and you don’t lose much of your time. Reward without risk is like getting paid without having to work. Eventually, the currency you are paid — the “reward” — becomes worthless since anyone can “earn” it.

Today most MMOs are orgies of advancement attended by over-powered characters where death is a rare event. The occasional death for a player is the only time that the world around the player says “enough!” and pushes back. Without a death penalty mechanic players would not respect for the world around them. A trivial death penalty promotes recklessness and carelessness among players that ultimately erodes the serious nature of the virtual world. The Leeroy Jenkins meme in World of Warcraft is a good example of a reckless player who has no respect for the environment around him.

A final thought about risk versus reward. When a player dies there should be some serious consequences that balance out the scale that is so heavily skewed by the glut of rewards. A robust death penalty serves as the constant and counterpoint of risk in the risk versus reward equation. Once the death penalty is firmly established with a set of consequences to the player, only then can the MMO designers begin to populate the other side of the equation — the reward — with value.

Virtual Death Gives Virtual Life Meaning

The death penalty mechanic is probably one of the most important and underappreciated mechanics in MMO history. Few designers fully understand and leverage it. Most players despise it. But without it, the MMORPG would lose all meaning and purpose.

Player death in a virtual world should never be just window dressing. Death should be a serious and solemn emotional event in a character’s life. Death should not be something that is welcomed or casually brushed off. Death should give us pause for thought. Death should sting. Dying in a MMORPG should make you feel horrible.

Death is a noble and wise gatekeeper that ensures that players develop the skills to progress from one level to the next. Those players that do not improve or those that act in a foolhardy manner will die and do not deserve to progress unless they master their class and the other MMO mechanics. This is how it should be.

Even though fantasy virtual worlds have hundreds of ways to advance and progress many designers and players do not appreciate the one single counterpoint to the all you can eat buffet of advancement: death. In most MMOs, death is relegated to a few seconds or minutes of inconvenience then all is forgiven as the player picks up where she left off.

Only Boss Mobs Experience Epic Deaths

In a genre where the current blockbuster MMO promises an “epic” experience, death is never epic unless you’re a boss mob. Regrettably, in today’s metric and consumer orientated “the customer is always right” game design ethos, a serious death penalty is dismissed by game designers as just another barrier to entry that must be removed.

Other MMORPGs such as World of Warcraft copied EQ but watered down the death penalty to the point that was trivial, token and had no appreciable effect on players. As a result, most fantasy virtual worlds feel less dangerous, less immediate and less real. When designers remove or water down the death penalty they are removing penalties and consequences for failure. You are also removing the elation and satisfaction a player gets when they survive a tough battle.

While many players might desire to be a god or have god-like powers, the reality is that once they became a god their existence in the virtual world would no longer pose any challenge and most players would die of boredom and cease to play altogether. Without struggle, our lives become meaningless both in virtual and real world.

From Sandbox to Game

In a past article, I remember recalling the experience of working on an isometric video game for one of the biggest publishers of a beloved space opera IP. At the point in the development of the game, we had not yet implemented a “lives” mechanic. At that point in its development, it was essentially a sandbox game where you could explore and engage in combat. It was mildly interesting but not really fun.

When we finally implemented the lives mechanic (I think it was 3-5 lives), the lead programmer noted to the rest of the team that he was finally starting to have fun playing the game. Suddenly the game we made had become fun overnight to a non-designer. Why? We introduced a finite number of “lives” and essentially created a penalty for dying i.e. the game was over and you had to start all over again.

Having a system where you only had so many lives meant that your choices and skill level meant something. Also, your progress in the game was dependent on how well you played. By simply adding the lives mechanic, we converted a sandbox experience into a game that was fun to play.


A MMO without a death penalty is analogous to that video game that our studio created. It might be mildly interesting but without any consequences for defeat or failure, there is simply little to no player satisfaction and this is precisely the problem with most MMOs today.

Before we finally delve into the details of loss aversion and why MMO designers should be leveraging it, first we must understand the concept of gain and how it applies to the MMO player.

The Power of Gain

The most basic goal of a player’s existence in a MMORPG is to survive and thrive. If you cannot grasp the mechanics of targeting a mob and of fighting a mob, you will never progress from level one to level two. The attainment of each level in a MMORPG signifies that you have learned and accumulated certain skills, acquired the tools to do so via abilities and gear and overcome certain challenges. In MMOs, successive levels require more experience to achieve. Additionally, each level gained increases the pedigree of the player.

The concept of level based advancement is the lifeblood of a typical fantasy MMORPG. Like the belt system in karate that rewards students with different color belts, the level system rewards players for their achievement of mastery. This system works because it allows only players who have completed certain requirements to be promoted to the next level. Being more powerful allows them to explore more dangerous zones and it also allows them to make more of a substantial contribution with their fellow adventurers in groups. As players advance in level in a MMORPG classes become more useful with specialized kills: warriors become better tanks, clerics become better healers and so on.

The concept of gain is clearly echoed in the player’s journey of advancement, progression, and mastery. Gain is a powerful motivator. As humans, we naturally and understandably love to get better at what we do. We love to accumulate wealth, power, status and prestige. All of these things are possible and achievable in a fantasy virtual world but in the real world they not quite so certain or easily attainable. So we can readily see why we as humans are attracted to the virtual power we can accumulate in a MMORPG.

Now let’s examine the flip-side of gain: loss.

The Power of Loss

Gain is a very powerful motivator for players as character advancement and the accumulation of personal power within a virtual world is one of the primary reasons that players play MMORPGs. We start off as level one characters and desire to level up so we can venture out into the world and explore more and do more by virtue of having more levels. Leveling up allows us defeat monsters to earn money to buy better gear and to acquire money and gear.

However, as we become more powerful we risk our time and investment with the possibility of dying. We want to protect and preserve our hard won status and our level — not lose it. As we advance in levels, gain becomes less of a motivator and we become more preoccupied with not losing what we have.

The more a player gains, the more devastating the loss if a player dies. When a level one player dies in combat, he risks almost nothing as he has not put hours into his character. Contrast that with a mid to high level player who has invested hundreds of hours of time into their character; when they die they feel a real impact in terms of inconvenience and experience loss. Therefore, the player will do all they can to protect their investment.

In the real world humans hate to lose. In a New York Times article, writer Carl Richards makes a great point that famous world-class cyclist Lance Armstrong was motivated more by the potential disgrace of losing than he was by the adulation gained from winning. He wanted to avoid losing at all costs and ultimately by succumbing to this, he faced the worse loss of all — it cost him his entire career. Aversion to loss is something all of us share in varying degrees.

The Yin and Yang of Loss and Gain

In a classic MMO like EverQuest your character could go in two different directions. You could gain levels or lose levels. Yes, you could actually lose levels and players know this and it looms large in their minds. As a guide and as a player I have seen players caught in death loops when they had been bound in a certain location such as Freeport and guards continue to kill them when they re-spawn. A level 60 player could lose all of their levels from such a tragic mistake.

EverQuest was truly unique because the more you advanced your character became the more you risked when you went out and adventured. This is because the higher you are in level mobs that produce experience are far more powerful and the result is players have a far greater chance of dying because of it. EverQuest had a rising trajectory of difficulty that created an increasingly more intense and gripping experience for the player.

Both loss and gain are symbiotic and complementary design principles. Both feed off of each other. Both are meaningless without the other.

The Power of Loss Continued

When I die in a real MMORPG like EverQuest as experienced on an emulated server like Project 1999, I feel terrible. It’s not just me, other players I have spoken to do so as well. Death is always around the corner in Norrath and people run from it like a plague. Death makes you respect the virtual world. Death does not suffer fools gladly in a MMORPG like classic EverQuest.

So what do we do as players to mitigate loss?

  • We attempt to become more powerful by advancing in levels
  • We seek to obtain better gear by both adventuring and purchasing gear from players and NPCs
  • We strive to become better players by learning how to play our class and improving our abilities
  • We seek the safety of numbers by banding together with other players
  • We avoid being exposed to situations where risk outweighs reward

When there is no real loss or loss has been trivialized or when victory is assured, we do not care about those things as much.

Why bother to upgrade your weapons when that extra damage will make little difference? Why bother to find better gear from dungeons, or purchase it from other players and crafters if the mobs you kill with your existing gear will die a few seconds slower? Why bother to group with other players for safety when dying is no real setback? Why bother to improve our skills when the mobs will die anyways?

When there is a serious death penalty, the thought of dying makes players want to become more powerful to mitigate the chance of dying. So the thought of loss actually makes players want to gain via progression and advancement. This loop is the central design core of the MMORPG. This explains why these early MMORPGs like EverQuest and even WoW to a lesser degree in its classic form were so compelling and addictive.

The Secret Ingredient

A robust and serious death penalty is indeed the secret ingredient that makes players respect your virtual world and makes those virtual worlds feel more real and immersive. The death experience is so powerful and avoided at all costs by players, that it promotes a high level of player participation and engagement in all of the advancement mechanics that those worlds offer.

Since loss aversion is at least 2 times more powerful than gain, the pain and loss of dying in a MMORPG has to be sufficient and serious enough to make up for all of the gain mechanics that players are offered. Since the death penalty is the only real loss mechanic (with the exception of some trade-skills have you losing ingredients and items during combination failures) the death penalty needs to be considerable.

We must also consider the fact that when we die in a MMORPG, we may experience personal disappointment and public shame by our failure to play our class properly. When in groups, dying impacts our fellow players by subjecting them to inconvenience caused by our death. We as players do not want our friends and group members to suffer. We also do not want our social status to erode either. The loss of our social status and reputation looms large and players will do all they can to avoid it.

I experienced this personally when playing on P1999 recently. Our group was fighting goblins in Highhold Keep and the shaman who was supposed to be healing started nuking the goblins instead of healing. I had just pulled mobs from the “raider” room. The shaman sent me a tell admitting that he was drunk and apologized. His bad choices and failure to heal me caused our group to wipe and we all lost significant experience. He immediately left the group and logged off in shame.  Our group had to disband due to having no heals. His fully geared corpse was there for at least a week until it decayed or he recovered it.

Something as simple as failing to pay attention and in a more general sense failing to play your class properly has serious consequences in a MMORPG all because of one thing: the death penalty. MMORPGs are more than just mere video games, they are environments where your choices and actions can have deep impacts on yourself and others. This kind of impact is simply not available in video games and absent from most modern MMOs.


We are all mortal. All of us must face the inevitable conclusion that someday we will die. The fear of dying and losing one’s life is the most powerful of human motivators. We as humans will do everything we can not to die and to stay alive. When we die, we do not respawn. Death is final. MMORPGs provide us with a unique and rare opportunity to vicariously exist in a virtual world where can cheat the Grim Reaper or Onyxia and get a second chance, a third chance and more. For a virtual world to truly come alive, the fear of dying virtually must echo the fear of dying we face in the real world.

MMORPGs that are properly designed create an environment that makes us fear virtual death because of the losses incurred. The fear of dying in a MMORPG is what makes them feel so strangely alive, visceral and real. That fear is the gasoline that fuels the player’s internal combustion engine of desire to become more powerful. That feeling of fear is a gift. It is something that precious few other video game genres can ever replicate. Unfortunately, that sense of fear is absent from most modern MMOs who have followed Blizzard’s development trajectory of seeing death as a barrier and a nuisance.

Without the possibility of loss, how can gain be meaningful? How can anyone derive satisfaction when there is little to risk and everything to gain?

Most players hate death penalties. But you know what? A player *should* hate the death penalty. A serious death penalty is appropriate punishment for failure and even when it’s not warranted such as what happens when a mob comes out of nowhere, one shots you and you die. The death penalty is akin to the unexpected pain of being burned when a child touches a hot element on a stove. The stove element doesn’t care if the child willfully or accidentally put his hand on the element; the pain of the burn is the same.

Dying in a MMORPG should be a devastating experience for the player. Without it, the thrill and elation of victory will never taste as sweet. Without serious consequences for death, there is no point of reference that serves as a contrast that makes your virtual existence meaningful.

On a micro level, death penalties in past MMORPGs like EverQuest seemed very harsh and punishing. However, on a macro level, a solid death was a much-needed mechanic that provides a counter-point that must equal the other side of the risk versus reward equation. Death is the noble guardian that says “You shall not pass!”. Death is like the mythical Atlas holding the heavy world of reward on his shoulders, preventing it from falling down into the ruin of its own excess.

Death in a MMO should be considered a wise teacher with many lessons to impart to his students that taste the bitter sting of his knowledge. Death should be a wake up call that makes you question yourself and ask yourself: what did I do wrong and how could I have averted this? How can I avoid this in the future? How can I be a better player?

A true MMO designer understands the reason for the existence of game mechanics in the first place. Richard Bartle made this point in his excellent paper The Decline of MMOs. In the case of WoW, the death penalty and too many game mechanics were watered down and even eliminated because the designers failed to understand why they were so important in the first place.

By failing to understand and leverage the proven psychological power of loss aversion via the death penalty, MMO designers have done the genre a great disservice and cheated their players from experiencing the pulse-pounding immediacy and gripping excitement only possible in virtual worlds. As a result, most MMOs have become day care centers where players dress up and pretend to be heroes all from the safety of their computers.

The human experience is all about overcoming hardship and struggle. By overcoming obstacles, we grow and we learn — we become better people.  Our struggle for survival has defined us.  Loss aversion is an integral part of the human success equation that has served us well over thousands of years of human history. The same should be true of virtual worlds. MMO players need mechanics that provide them with challenges, hardships, dangers and struggles to give their virtual existence purpose and meaning. A robust death penalty mechanic and the loss aversion associated with it is a powerful reagent in the MMO success formula. It needs to be brought back into the MMO design ethos and given its rightful place as a fundamental design principle.


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