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The Daily Grind: Are death penalties overkill?

This is one topic that never fails to wind up as a huge discussion any time we get together with gamer friends. Some of us who have been around since the early days of MMOs remember the harsh death penalties that many of these games included. If you died in EverQuest, you would lose experience -- lose too much, and you could lose levels. You also had to run back to your corpse either without any gear on unless you could find a friendly player to rez you. Ahh, the memories.

Nowadays, death is disposable in games like World of Warcraft. You get killed by another player in front of Karazhan? No big deal. Just rez and head back. In games like WoW, death is less of an impact than it is an annoyance. It represents a whole 30 seconds you're going to have to spend running back from the conveniently-placed graveyard. Of course, you also resurrect with all your gear on you.

And then there are they hybrids like City of Heroes; you don't ever lose enhancements or inspirations, but you do lose some experience when you die. Some people feel like this is a good solid trade-off. It teaches you to be less of a loose-cannon since death does have some impact on your character. On the other hand, it's fairly easy to work off debt in CoX, and you never have to chase down your corpse to either resurrect, or to retrieve your items; you just start in the hospital or your SuperGroup's base.

So what do you think? Are the newer no-guilt, no-penalty deaths best, or were the older ones the best? Do you think death penalties teach players to think over strategy before rushing in, or do you think they'd do that anyway? What do you think of the hybrid systems that cause you to lose experience, but not gear? Which game has the best system in your opinion?