The latest Warhammer Online newsletter contained information about the "living guilds" system of WAR, and that prompted people to rethink guild functionality in MMORPGs. Michael from MMOG Nation has a post on how to improve guilds, and there are lots of other good ideas sloshing around in the blogosphere.
A big problem when discussing guild functions is the success of World of Warcraft. Don't get me wrong, WoW is an excellent game, and by far the best game available out there. But even a great game has its weak points, and in guild functionality WoW is definitely sub-par. For years all a guild was in WoW was a chat channel and a guild tabard, only recently has a guild bank been added. If you look at the competition, other games offer guild ranks, guild housing or even player-run cities, and guild support on the official game website. But because WoW has so many millions of subscribers, many people think that guild functions can't be so terribly important; if WoW can live without them, everybody can. I don't think that is true.
A MMORPG for most players goes through several stages, from initial enthusiasm to final burn-out. And one important stage is the one where you already got bored by the game, but keep on playing because all your friends are in the game. Everquest, where social ties in guilds were strong, is still alive because of this. If every player just stays half a year longer in your game due to strong social ties, the added money you make from that quickly adds up to a huge pile. The population of WoW is less stable, and prone to peaks when new content is added and valleys as soon as people grow bored of the new content, because the social ties in WoW are much weaker. And that is directly connected to the fact that there is so little guild functionality in WoW, and no purpose for a guild beyond raid progress. Add the fact that raid progress is often sped up by leaving a guild instead of sticking with it, and you'll see how relatively little WoW guilds are adding to social cohesion.
The proposals of MMOG Nation go in the direction of in-game guild advertising and recruitment. But that is only the start of a long list of possible features. As far as tools go, I think MMORPGs should support guild forums, so that somebody invited to a guild automatically has forum access based on his rank in the guild, and he can reach the forum by clicking on a link from inside the game. There should be in-game guild event calendars. A list of guild mate tradeskills and recipes. Maybe even a choice of various DKP systems, kept track of by the game itself. And that are just some proposals for better guild tools.
Beyond tools, MMORPGs should also have guild functions that add purpose to a guild. EQ2 and LotRO have guild ranks. In City of Heroes / Villains the guild builds a base that can be attacked by other guilds. AoC and WAR are promising keeps and siege warfare. Star Wars Galaxies has guild halls as the center of player-built cities. In A Tale in the Desert guild can build villages and work together to construct pyramids. The possibilities are endless. The important thing is that there are activities in which every guild member can participate at his own pace, and not just raids that are limited to a group of a common power level and time slot.
WoW proved that a MMORPG can survive with minimal guild functionality. And ATITD shows that a game with great guild functionality can have a minimal number of subscribers if all its other features aren't all that popular. But I stand by my assessment that better guild functionality can prolong the life-cycle of a game. Network effects are well known, and it is obvious that a stronger in-game network enhances the network effects on subscription numbers and game longevity. I really hope the WAR living guilds will be as good as announced, because that could really boost that game.