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I recognize that some level of PVP is essential to encourage interaction and make the game interesting. Reading the comments, I think much of the resistence to PvP is based on experiences with games that encourages (or at least did not discourage) PvP combat for it's own sake. I agree in that, while I would have no issue with my character being attacked by bandits with transporting valuable cargo, I would not enjoy a game where my character was in constant fear of being attacked by strangers while peacefully walking down the street. I don't see how a sandbox MMO can be sucessful if a character played as a psychopath on a continuing killing spree is able to prosper and advance faster than his victims.
GW seems to be considering ways, such reputation, to discourage PVP attacks that make no sense in the context of the game. If a bad reputation has enough of a negative effect on a character's ability to buy and sell, enter settlements, etc., a character that goes about attacking others without reason cannot prosper and may soon find it difficult to survive. I am hopeful the result will be a game that implements a nice balance that discourages irrational PvP without totally supressing rational PvP