If you can never lose, you can never win.
This thought occurred to me as I was killing some time with Bejeweled 2 on my phone a few days ago. I decided to try "Endless" mode, not really sure what it was. I certainly didn't expect it to be a mode so easy you can never lose, such that you can endlessly play the game with no risk of having to stop. After a few levels I began to wonder what the point was, and why on earth it bothered to keep score. The score no longer represented skill, it represented time invested, and with no risk of losing it was a fairly meaningless indicator of "winning".
It didn't take long to see the parallels with MMORPGs. A MMORPG is a game you cannot (with a few exceptions) ever "lose". There's no game over, no "oh crap, that's too hard, I died and have to start over." I'm not saying that's good or bad, it's just the way it is. I know some people long for "hardcore" servers (or games) where character death is, in fact, game over. I'm not one of them.
It does leave MMORPGs clearly in the land of games you can never lose, and as has been noted many times in the past there's no "game over, you've won!" screen in MMO land either. However, it's necessary for a game to provide the feeling that you can win or lose, whether or not that's really true in the larger sense, or you end up with a pointless treadmill like Bejeweled 2's Endless mode. MMORPGs do this by breaking content up in to smaller chunks, and giving you the potential to fail at completing that chunk. You can't lose the game, but you can lose an encounter. This gives the illusion of winning by creating an illusion of loss. A quest is an example, as is a dungeon, a raid, or a PvP battleground. These are all discrete items of content that can be failed within the context of the game without providing a "game over" scenario, yet generate the sense of accomplishment players need to keep playing.
The chance of a player failing at any given task can be considered the challenge of that task. Quests are almost always a sure bet, unless it's coded in such a way that the player can fail the quest and never get it again. Group content such as dungeons or raids tend to be harder, and PvP in a way is the most challenging of all, as in any fair encounter you are unlikely to win more than 50% of the time (pre-made groups vs. randoms, twinks vs. normals, notwithstanding).
Tuning the challenge of content, then, is a key part of making an MMO work, not just because players will quit if the game is too hard, but because there will be no sense of winning if the content is too easy. Quest based games such as World of Warcraft tend to have the lowest point of entry for new players, because quest content tends to be easy, and so players can get into the game and get used to things before trying harder content. Unfortunately, the trend seems to be for quest content to stay easy, and in some cases (again, WoW is a good example) quests tend to get even easier as your character levels up and you get better at the game, eventually becoming completely trivial content that most players could complete with their eyes closed. We've just entered Endless mode for MMOs. Mash the buttons and "win".
One of the reasons I think WoW has suffered in recent times is that the entire leveling experience is "no loss, no win" endless content, and then things get switched up at the endgame such that you can lose, quite brutally, and take your whole group down with you when you try to do the heroic dungeons. Blizzard's response to the outcry against this was to make the heroics easier, but what they really needed to do was make the quest content harder. Making the endgame content easier just results in lowering the sense of accomplishment players have by completing it, thus more rapidly leading players to reach "endless mode" and quit at the pointlessness of it all. The big jump in difficulty between the two modes of play was a serious issue, and while the fix they made was probably the only reasonable one (re-tuning an entire games worth of leveling content vs. endgame dungeons?) it's not going to help the game in the long run.
This all comes back to my recent experiences in Star Wars: The Old Republic, where it feels like quests are actually getting harder as I level rather than easier. This is good. As my character builds his strength and I improve my skill at playing the game I should be able to handle more difficult tasks, and I have some hope that SWTOR is going to do this, at least some of the time. As an example, last week my Jedi Guardian had a class quest that pitted him against a boss level mob. He had 4 times the hit points I did, and both my character and his companion were defeated 3 times before I found a tactic that worked. It was a challenging battle, I wasn't sure I was going to be able to do it at all (lose), yet in the end I managed to do it (win), creating a great sense of satisfaction with the results. Of course, the potential of losing was an illusion, as I could have simply leveled up some more or found some friends and tried again, so I was never in any danger of NEVER completing the quest, but the illusion of losing was still there.
I had a similar experience last night where a friend and I attempted a Heroic 4 quest (a quest tuned for 4 players) with just the two of us and our two companions. We almost did it, with careful planning and coordination we got most of the way through it, before hitting a wall at the end in the form of a boss with 26,000 hit points. We couldn't beat him, so we "lost", but we'll be back with reinforcements, and I know beating that boss will feel good.
So far, in my view, SWTOR has "challenge" down better than WoW, though whether that stays true in the long run is yet to be seen, and whether that is actually a winning formula is also unknown. WoW has millions of subscribers, and while there's evidence those subscribers are finally starting to burn out, they've maintained those levels for years and made more money than any other MMORPG in history. It's hard to argue against success, so I'll be curious to see how things sit a few years from now for SWTOR and WoW, and what tack Blizzard takes with their new game, Titan.