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Originally posted by Larsa Yeah, both Haven & Hearth and Xsyon are games made with ideas like in the OP. I very much enjoyed both games but it's also clear that we're looking at niche territory here. It's a design that won't get a mass market and thus won't get a sizeable development budget. There can be good gameplay but polish, features and graphics will be less than what most MMO customers expect these days.
I think it's tricky to call these games niche.
The existing implementations aren't game-like enough. If you made a game where building your settlement (or contributing to a larger one) had the moment-to-moment fun of a really good game, then that's going to be much more widely appealing.
Things like H&H and ATITD's crafting systems are the first step towards being stronger games (as sandboxes) because you don't just click a button and wait, you set a number of crafitng operations in motion which all have various durations and (a) there's gameplay to learning the timings so you can optimize your time and (b) there's enough of these different tasks that you're constantly in motion doing something. Those are the first major steps to being a fun crafting-centric game. The next steps are to really create entirely new gameplay around crafting. It probably can't even feel like a crafting minigame, but rather it has to feel like crafting is a full game unto itself.
Certainly without that sort of gameplay innovation, they're a niche category. But I think there's a ton of potential upside.
"What is truly revealing is his implication that believing something to be true is the same as it being true. [continue]" -John Oliver
I'm pretty sure this game has been made...
It's called LIFE. Go outside. Take a stroll to your local market. Those aren't NPCs behind the counter. Head to the police station. Again, more player characters and not NPCs. Oh, and if you want you can test that perma-death idea too...
Geez... Way to lose sight of the purpose of a game. A real-life simulating game where you need masses of players to create the world and content also requires incentives to do such a thing and be entertaining to do it. All of the elements have to come together for a purpose and be fun. Many games have bits and pieces of what you've suggested. I know MO has been tossed out there. But another one similiar is EvE Online.