When looking into the question of what motivates people to play MMORPGs, you could either ask people for their motivations, or observe what they are actually doing in these games and draw your own conclusions. And you will probably find that today's subject, challenge, is the one where the gap between what people say and what people do is the greatest. Everybody says that he is motivated by challenge, but then constantly engages in behavior designed to eliminate it. There is even a good argument to be made that MMORPGs are intrinsically designed for challenge avoidance.
What is so special about MMORPGs and challenge? In most games your chance of success is determined by your skill and random factors. In MMORPGs your chance is determined by skill, random factors, and your character stats, including level and equipment. Recently The Ancient Gaming Noob Wilhelm2451 pondered his daughter's question of Why Does Tetris Get Faster?. Tetris gets faster because that way with every level the challenge rises, so sooner or later every player gets to the point where the challenge is equal to his skill. If you can consistently get to level 10 in Tetris, you are a better Tetris player than somebody who can only get to level 5. Your skill goes up while playing, because you learn, but the challenge goes up quicker, so every single game of Tetris ends with you losing, and the level at which you lose is a measure of your skill. Then you start over, and because your skill goes up, maybe in the next game you get one level further. If you would draw a graph plotting the maximum challenge you can beat over time, you'd see a constantly rising curve, but which is getting flatter, until it levels out at your maximum potential.
Now imagine MMORPGs would work like that. You start with a level 1 character fighting level 1 mobs, and you would *NOT* get stronger by gaining levels and equipment. If your character would always remain at exactly the same strength, and only your skill and random factors like critical hits would determine your success, then the maximum level of monster you were able to kill would say something about your playing skill. Some players would be able to kill level 5 monsters with their level 1 characters, others would maybe be able to kill level 10 monsters. But obviously you'd never see 25 level 1 characters raiding Ulduar. (Note that with patch 3.2 in World of Warcraft you can turn off earning experience, so it should be possible now to try out how far you get in the game without gaining levels or equipping any gear beyond what you start with.)
Instead in a MMORPG your character gets stronger not just from learning how to play the game, but also by acquiring experience points, levels, and gear. If you draw that same graph again, with the maximum level of monster you can beat versus time, you see that it is rising much faster now. It is still totally possible that you learned something in the last hour you played, and got a bit better that way. But even if you didn't, by just killing monsters for that hour you got stronger because you gained a level and found a sword that deals more damage. The curve that plots your power over time doesn't flatten out, at least not until you reach the level cap. Most importantly that means that the game never reaches the Tetris point where it is too challenging for you and you can't improve any further. If during the leveling process you ever get stuck, you always have the option to keep killing the last mob you were still able to kill for some time, until you gain another level or earn gold for some better gear, and then you'll be able to overcome that challenge that blocked you. It is technically impossible to get stuck at, lets say, Hogger, no matter how bad you are at playing World of Warcraft. Beating Hogger with a level 1 character with just the starting equipment is a challenge. Beating Hogger at some point, after having gained both levels and gear, isn't really a challenge, because given sufficient levels and gear anyone can do it.
So while MMORPG players say they enjoy the challenge, what they actually enjoy is the illusion these games offer of beating challenges. It would be perfectly feasible to design MMORPGs that get more challenging with time, where beating a level 40 mob with a level 40 character is much more challenging than beating a level 1 mob with a level 1 character. The original Everquest, for example, worked that way. Add a death penalty, where you lose levels and experience for failing, and you could design a game where people get stuck half way up to the level cap, when the challenge level of the game becomes higher than their skill, and how far you got into the game says something about how skilled you are. But of course getting stuck isn't fun, and would probably lead to players quitting the game, thus losing monthly revenue to the game company. In consequence over the last 10 years death penalties have been reduced to you just losing some time, not levels or gear. And the leveling process has been designed to guarantee that the inherent power of your character regardless of skill grows as fast as the challenge. Nobody "can't get past level X" in World of Warcraft, or any other modern MMORPG. It just takes time, and there is always the possibility of players giving up out of boredom. But if you can beat a level 1 monster at level 1, you will be able to reach the level cap, guaranteed.
At the level cap, especially in World of Warcraft, something curious happens: Your growth of power over time slows down, because you don't earn levels any more, only gear. At the same time the challenge curve gets much steeper. The developers simply don't want you to kill the last boss in the game, because that might be perceived as a "game over" screen, after which you quit. Thus, if we consider vanilla WoW before the expansions, suddenly you could only advance further by raiding, the speed at which your character power can go up by raiding is limited by raid lockouts and loot drop rates, and it became possible to get stuck. Some players got stuck because they simply couldn't pass the hurdle raid organization posed, being available for several continuous hours simultaneously with 39 other raiders several times per week. Other guilds got into raiding, but got stuck at some point where raid difficulty markedly increased, for example at the first boss of BWL, Razorgore.
Since then, the Blizzard developers are trying to tune the end game challenge. The goal, for them, is to keep the maximum number of people playing for the maximum number of months, as their revenue depends on that. Both people getting stuck early and giving up in frustration, and people reaching the final boss and leaving because they have beat the game, diminish Blizzard's revenues. It turned out that initially there were far more of the former than of the latter, so measures were taken to keep people from getting stuck. The organizational hurdle was lowered, with raid sizes reduced from 40 to 25 and 10. For people who still couldn't find the time to raid, alternative content to get similar rewards, like daily reputation quests or PvP epics, were introduced. And raiding was tuned so that the *average* player still could progress quite a bit before getting stuck.
So now we are back to the observation that what players say they want doesn't match what they do in the game. MMORPGs offer a wide degree of freedom in choosing challenge. Nothing stops you from attacking monsters that are higher level than you are. Even in the supposedly so easy World of Warcraft you *could* level up in a much more challenging way, doing only red difficulty quests, fighting only higher level mobs, and so on. You are in complete control of your challenge! But in practice the overwhelming majority of players constantly engages in behavior designed to minimize challenge while maximizing rewards: We constantly try to diminish the challenge of raid encounters by getting better gear or watching strategy videos on Youtube. We overgear for endgame solo and small group content. We twink our alts. In PvP games we organize keep raids at 3 am to make sure there are no enemy players to challenge us. When given the choice between more challenging and less challenging games, we flock to the least challenging ones. Some people even cheat, exploit game bugs, buy virtual gold, or hire powerleveling services, to get stronger and avoid any challenge on the way. In Free2Play games people pay the game company for microtransaction items that decrease the challenge of the game.
In summary, we replaced real challenge by an illusion of having beaten a challenge we in fact carefully avoided. What we had was games like Tetris, where the level you reached was a measure of your skill. What we got now in MMORPGs is a situation where you just care about reaching those levels, faking a higher skill than we actually have by replacing skill with time investment. We keep the outer trappings of success, reaching the level cap, strutting around in epic gear, but avoid the painful process of having to get actually better at playing. We are playing a version of Tetris that *doesn't* get faster, where you get any highscore by just playing long enough, and in some cases even pay somebody else for that highscore. Challenge itself does not appear to be a major reason of why we play. Any attempt to gain customers by designing a game that is *more* challenging is bound to condemn you to a niche market. For the mass market you need to avoid challenging the players, while simultaneously keeping up the appearance that there is a challenge to beat.
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