Yes, the death penalty. No, not government sanctioned murder - something much, much, scarier. I'm of course thinking of the penalty applied to your character after dying in some games. That's right: bad stuff can happen to your character when it dies in a game! Spooky!
I'm a PvP player. I might not be as hardcore as some people like to think they are, but I enjoy PvP nonetheless. And just to be clear: /duel is not PvP, nor is "group vs. group NO POTS GG NO RE" be all end all of PvP - unlike what some people like to think. Organized group duels are just a minor part of PvP. To put it bluntly: PvP is every fight between players within the rules established on the server. Players who want additional restrictions are free to apply these to them self - but should not expect others to do the same. Anyway, that's the short version of my rant against the incessant whining about zerging, ganking, ninjaing (an attack at an hour when few people are around to defend), and whatnot. Dude, your character died - it is to be expected, get over it. There are players who want to kill you - and they will always be there. If you can't accept that you should consider avoiding PvP.
Lately the question about reward and penalty for PvP has resurfaced, partly because WoW has decided to have absolutely no penalty for death in PvP - other than 5 minutes to recover your corpse. Admittedly, the death penalty in PvE is minimal as well - but there is a tiny penalty (10% durability loss on your equipment - a small indirect loss of money). Due to this people feel it prudent to suggest adding their favorite death penalty, with no regard to the differences in gameplay between WoW and the game that have that penalty. On the other hand you have those who don't want any penalties at all, people who actually feel they are entitled to PvP 24/7. These are probably the same people who want everything else to be easy, free, and meaningless as well. The need for a death penalty in PvP is no less than for PvE - and I see few people complaining about the PvE penalty (other than it being too soft). To be able to recklessly attack other players repeatedly is no better gameplay than the ability to attack monsters with no fear of consequences.
To be fair: there doesn't have to be a death penalty, other measures exist - but there are situations where it is difficult to employ these, a death penalty then seems the only remaining solution. What is the point of fighting if there are no winners? And for someone to win, someone else has to lose. I'll get back to the other mechanics that can be used, but if we assume these can't be used - how then do we decide who win? Sure, if you look at PvP solely as a fight between two players, then a death penalty will have no impact - the first one to die lose. Neither does it matter who you fight, as long as there is someone to fight. However, if we expand PvP to also include the fight over, or for, something, rather than just against someone - it becomes impossible to decide who wins. A way to decide this is needed; the death penalty is one such measure.
Let's compare PvP to sport. Pick any team sport (PvP is generally a team effort) and
apply these changes to the rules:
I think that is all you need. Now, your sport is PvP. Wait, I almost forgot - the winning condition has changed now: You win when the other team gets bored and leave. And that can be fun - the first few times. Then attrition set in, and then people leave for good. To bore the other team to death is a relatively poor winning condition in my opinion, and make no mistake - that is the winning condition. Assuming the other team doesn't give up, you can't really win - unless you have overwhelming numbers. Having overwhelming numbers is usually the first sign of the other team giving up though. When it takes 10 minutes for the losing team to get back and organize, winning a battle is a temporary victory at best.
Now, there are several ways to change the winning conditions: sports generally employ a combination of a score, time limit, restricted number of players, limited field of play, a referee, and rules designed to make it a fair competition. With a few exceptions, PvP does not employ any of these measures - with the result that attrition is the only real winning condition left. To avoid this there should be a point where one side has to admit defeat and retreat, it shouldn't have to come to the point where one side can't win because everybody has retired. To do this there should be a penalty on "minor failure", in the case of PvP in a MMOG this minor failure is death - thus a death penalty. Obviously, this could be turned around to give a bonus to the killer instead, but this is probably too easily exploitable.
Before looking at different types of death penalties, let's examine some of the other measures that can be employed, and the conditions needed for them to work:
Time limit: There have been several suggestions on imposing different types of time limits. The goal of these suggestions has often been to make PvP revolve more around the person making the suggestion. E.g. trying to limit certain PvP activities to e.g. peak hours - ignoring the fact that there are people who would otherwise naturally play on that server might have a job situation or something that makes it impossible for them to play during peak. "No more ninja raids!" pretty much translate into: "When I can't PvP, no one else should be allowed to either". And thus take away the ability to enjoy these activities for people who play off hours - unless they transfer to a server in a different time zone. Some games have suggested only allowing players to play on servers in their own part of the world to reduce the number of ninja raids. One would think this would actually encourage ninja raids since it significantly lowers the number of people playing off hours (and thus lowers the number of people needed to perform a raid).
The other, and more logical, version of a time limit would be that the objective has to be reached within a set time limit to succeed. As I see it there are three basic ways to start the timer: Automatically, by the attacker, or by the defender. If the timer is started automatically at the same time every day you get the situation above, it excludes some people and it could very easily become routine for the rest. If triggered by the attacking team you'd put the pressure on the defenders to muster and organize fast enough. It allows for small attacking forces relying on surprise and speed. If triggered by the defenders it probably turns into a competition in having the largest force (aka zerg), as both sides know exactly when the fight will start. While a time limit doesn't require a separate area (an instance), I believe it would be preferable.
SB does this outside of instances though, and it seems to work acceptably. In SB the defense decide the time of the attack. But as mentioned, without a limitation on the number of players involved - this becomes a competition in having the largest force. Now, if you decide on using an instance to reduce the number of players on each team - how do you decide who are, and who are not, allowed into the instance for a raid sized objective? You can't really (it would probably boil down to first come, first served), and thus this solution would probably only work satisfactory with group-sized objectives. However, with group-sized objectives you don't really need a time limit - the first group to wipe lose.
A time limit could work relatively well on its own though, but it would probably have to come with a number of additional restrictions. Chances are it would be either too restrictive, or favoring a certain type of players to a very large degree - most likely the large guilds.
Restricted number of players: Self-explanatory; only a restricted number of players can participate in a specific event - again this pretty much requires you to host the event or objective in a separate area. This is, in my opinion, a good solution, maybe best seen in GW. I'm not sure if battlegrounds in WoW will have this restriction, I believe neither DAoC nor SWG does. You can either make a group previous to entering the area, or one can use first come first served, or random assignation - there are pros and cons to either, but I think arranged is best over all.
Restricted number of appearances: Again, this probably works best with instances. Once people die (and their resurrection timer is up), they are kicked out of the instance and not allowed back in. Also requires a restriction on the number of players to be useful.
Referee: In one word: NO! This can only lead to people feeling slighted, and will turn verbal attacks on the developer into a PvP strategy. Considering the amount of whining about imagined class imbalance - an imagined unfair ruling by a referee would probably be many times worse.
Rules: Here computer games have a distinct advantage over regular sports: Rules can, and should, be hardcoded into the game! There really is no way to justify having rules that are not coded into the game. A number of games have "be nice" rules that frown upon e.g. ninja looting, but ninja looting is a problem that can be fixed in code - why should the players be held responsible when the developers are not? Of course, there are limits to this. It is impossible to cover every single possibility without making the game horribly restrictive. There are situations where additional rules are acceptable - at least for a period of time.
The common thread here is that, just as in sports, you need a limited area where the PvP takes place for any of these methods to be efficient. If one chooses to allow PvP in an unlimited area - these methods will work rather poorly, leaving the death penalty as one of few viable options.
It is impossible to discuss the pros and cons of any given penalty outside of a gameplay context. Therefore, while discussing the penalties in a general manner, I'll relate them to WoW to see whether or not they would fit the game. There are three major groups of penalties: Character, Time, and Equipment.
I'll start with penalties directly on the character, the best known of which is known as permadeath (permanent death). This was probably the first type of penalty, and not because it is the most obvious one - but because the guy who owned the arcade wanted to make money. Then someone figured out that "You Lose" could be replaced with "Insert coin to continue". This was back when a "boss mob" was designed specifically to kill you. He was not supposed to be merely difficult, he was supposed to kill! He was the moneymaker. There is no point at which people are as likely to insert another coin as when they die with the final mob on a level at half health. There is a number of possible ways to implement permadeath, just to mention a few:
Basically death is either: unavoidable, protected against, or bargained with. Permadeath is not really an option for an item centric and level based setting like WoW though. It doesn't matter that the advancement is relatively painless; it is still too time consuming to expect people to repeat it several times. With the current trend in MMOGs where a large portion of the gameplay is classified as "endgame", and not accessible until the advancement process has been completed, permadeath is going to be rare. Permadeath probably works best in settings where you know you're going to die and act accordingly - e.g. the Call of Cthulhu pen and paper RPG where, if you didn't die, you would eventually go insane.
The only other character related penalties I can think of are permanent and temporary loss of stats or abilities. An example of a permanent one is the 5% stat loss for murderers in UO, or the -1 con you get from being resurrected in AD&D. These can still be regained, but not as easily as temporary ones. Examples of temporary ones are resurrection sickness (X minutes with a percent reduction in your stats, seen in e.g. DAoC), or vitae (from AC) where you had to earn back your stats and skills by gaining xp. Either could be used in PvP, one penalty is equivalent of an X min suspension, the other require you to engage in PvE before returning to PvP.
A different type of penalty is directed towards time loss. I can think of three, but only one that is any good:
The final penalty is directly on equipment. Basically it is the loss of 1, X, or all items upon death. This is a penalty that works only in very specific situations. In item centric games like EQ and its derivates this is a poor penalty. Equipment is the character. The loss of some items might cripple a character, in particular those that are gained through a one time only quest (and thus can not be replaced). Even if all your soulbound (no drop) items were not lootable this would work poorly.
But it worked, some might even say well, in UO. This was because equipment in UO was easily replaceable, and therefore this worked much like an indirect gold loss for most players. AC had a slightly different model; you dropped a number of items depending on value and certain other factors. In its original version this is a relatively harsh penalty. However, the players figured out the factors that decided what you dropped. And then started hording junk items they would drop instead of their equipment when they died - changing this from a penalty on equipment to an indirect gold loss. What you lost was the time spent finding items to protect your equipment and the money you would have made from selling them (turning it into a stupid version of insurance).
I find it amusing that some players would suggest the AC type item drop with insurance items, rather than an actual insurance or durability loss. It's almost the same penalty - just with an ass-backwards implementation. Thus, in reality, there has never (to my knowledge) been a game with a successful implementation of equipment loss that wasn't a different penalty masquerading as equipment loss.
Just as the lag monster is the most dangerous monster - attrition is the most dangerous enemy in PvP. To combat attrition one has to make sure battles do not last forever. To do this I believe one either have to look to regular sports and add similar restrictions to those seen there, or one has to make sure people can't PvP 24/7. Or more correctly: to make sure PvP doesn't turn into one huge perpetual fight. If it can be broken down into several smaller fights, with separate goals that can be reached independently, within a reasonable amount of time, then that is probably a better solution. But to do this one has to have mechanisms in place that discourage the perpetual fight. And for a PvP environment with unlimited number of combatants, over an unlimited area, and with no time limit - one of the few remaining ways to discourage the perpetual fight is through a death penalty.