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Lotro experimented with this on a small limited way. And if this is a redeux of previous topics, my apologies.
You know what's wrong with normal factional pvp? Neither side is meant to lose. Okay that's not all that's wrong, but that's a fundamental source of discontent magnified by the slightest imbalances in classes, population, and organization.
Imagine a system that can appeal to hardcore perma death crowd, full loot pvp'ers, give a sense of achievement to one side, and be non-threatening to those on the other? It's literally an mmo for the full spectrum of mmo gamers. Maybe you see where I'm going, but let's flesh this out a bit.
One side would pick your normal classes, and play like many mmos already do. The good part of about this concept is it does not dictate what kind of leveling system should be used. Skills, levels, etc, all can work. Good guys play the normal mmo, except that some enemies, like goblins, orcs, bandits, etc, all the way up to dragons are controlled by players, who will try to use their wits to overcome the distinct advantage in raw power good characters have.
Most enemies would still be npcs, and those enemies can be killed by both sides. The monster players would be the 'smarter' races of monster. Each area balances the level/power of both sides, much like GW2 does, so that there's an opportunity to do some more interesting things regarding enemy players.
For example, permadeath. An enemy player chooses from a few race/class choices, and picks a spawn location. They get an overhead view of the area, and can try to avoid or ambush a player. If they are careful, they can skulk around killing npc monsters to increase a few levels (very quickly). Players who die to monster players drop gold. When a monster player dies, it's permanent. All levels, gear (if any) etc are lost. There would be a leaderboard, with all time, monthly, weekly achievements of the various monster tiers that died with the highest level, most gold, most player kills, etc.
Upon death, a monster player could spend their gold to reincarnate as a more powerful monster (otherwise, they go back to tier 1 choices). But outside of the lowest 2 tiers, the slots for enemy players is limited. That's so that these higher tier monsters can start to be real threats without zerging. As more slots for a tier fill up, the gold point cost goes up as well. Imagine accumulating enough points to reincarnate as a dragon. Hard to kill, lots of abilities, and a major threat to anything less than a full group of players, but only a handful of slots open (or per instance).
Good characters earn special bounty points for killing enemy players, the higher the tier, the more they get. They can use these points to buy elite level equipment and items.
The vision is to have packs of organized monsters picking their prey, causing real trouble (oh I forgot, their ability to kill town npcs as well), usually eventually dying. Eventually some packs becoming legendary with the amount of xp and levels they've accumulated, but always having to be careful and avoid running into organized groups of players. And on some occasions, perhaps due to server events or modifiers, instances where monsters go all out war on towns and players have to push them back.
God what a disorganized mess of a post this was.