In this article, I examine the cost of defeat in PvP and how to minimise these costs without ruining your PvP performance.
Rank and file:
A classic tenet of MMO design is that bigger is always better. Barring a small miracle, a level 60 player in World of Warcraft would always defeat a level 40 player in a duel. Furthermore, a level 60 player in the best, most expensive gear available will almost always beat a similarly levelled character with cheap gear. This idea doesn't hold true for EVE Online, where the larger and more expensive ships are not necessarily better. The realisation that an expensive battleship or capital ship is not inherently better in all ways than a cruiser or frigate often escapes new players, who try to get into one as quickly as possible.
The primary reason that bigger isn't always better is that EVE's ship classes have been stratified into categories that fulfil certain roles. Frigates, which cost a lot less than a million isk each to lose, make excellent tacklers and are as essential to a PvP fleet as battleships. Cruisers have their own part to play, making great damage dealers, heavy tacklers and electronic warfare specialists. Battleships can't fill the same roles as frigates and tend to have very poor anti-frigate capabilities. Instead, they make excellent snipers, resilient damage dealers or heavy electronic warfare platforms. An efficient mixture of ship types in a fleet is key to its success on the battlefield, making all ship types useful in a fleet.
When I chat with people about EVE, the ones claiming that the death penalty is too harsh are usually the same people who spend all of their isk on one ship. Using the best gear you can may seem like a good idea but it increases the cost of losing the ship significantly. It's all too easy to get carried away and forget how much isk you're paying for very small improvements. A fully tech 2 fit cruiser is at most 50% more effective than a standard tech 1 fit but can cost over ten times more to lose. This trend continues with expensive rigs, faction gear and deadspace modules offering small increases in power for large increases in ship cost.
Using the best equipment you can afford is fine for ships you don't expect to lose such as your favourite mission-running battleship but when heading into PvP, the chance of losing your ship is very high. Paying a lot of isk for a slight edge over your enemy in combat isn't cost-effective because fair fights with equal numbers on each side are virtually unheard of. EVE's PvP is strongly group-oriented and no matter how much isk is spent fitting out a ship, a larger group of much cheaper enemy ships will usually still have the upper hand.