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The Problem
The term "The Christmas Tree Effect" (TCTE) refers to what it would look like to view a high-level PC through Detect Magic (or similar): they'd be lit up like a Christmas Tree, many different magical auras from their varied magical items. Typically, the term is used more specifically to call upon the mundane-ity with which high-level PCs treat magic items. And really, if you're going to pop on that +2 INT headband and never mess with it again... why should you care about it, except to upgrade it to a +4 later on?
The Common Solution
I see many recommendations for "low magic" or even E6 campaigns as the best (or only) way to combat TCTE. Unfortunately, this leads to more work for the GMs of the world, as the Pathfinder system is built with certain assumptions in place about the power and resources that PCs have access to.
My, Rather Simple(-Minded?), Solution
Ideally, there is a major distinction between boring "constant" magical items ("Big 6") and fun, interesting magical masterpieces with tons of history and meaning to the character and player. With the normal system, this line is heavily blurred as both kinds of magic items work the same and take the same resource (gold) to access. What I'm thinking of doing is introducing a separate resource to accommodate the "Big 6" bonuses, and any other miscellaneous magical effects that aren't "special" to the player: wands, scrolls, potions, and many wondrous items.
When the PCs defeat an enemy, a portion of that enemy's normal treasure stash is granted to the PCs in the form of Talent Points, where 1TP = 25gp. Notably, any magic items (or effects from their own Talent Points) that a defeated enemy has should be converted to a TP value and given to the PCs as such. These TPs can then be spent at any time to gain the effects of a magic item, under the following rules.
-Talent Points with a converted cost (1TP=25gp) equal to twice the price of an always on, constant item can be spent to forever henceforth gain that always on, constant effect. If the item can normally be ungraded (+2 Str -> +4 Str), so can this effect, using the same pricing method.
-Talent Points with a converted cost equal to twice the price of an item that has a limited usage that resets at certain periods ("per day" uses, or similar) can be spent to gain that same limited usage with the same reset period forevermore. Using these abilities requires an action equivalent to the action required to activate the original item.
-Talent Points with a converted cost equal to twice the price of an item with a limited number of activations (wands, scrolls, potions) may be spent to gain the inherent ability to activate those effects the same number of times using an equivalent action for activation. (For example, Jim could pay 4TP for the one-time ability to use Cure Light Wounds at CL1 on himself, as per a potion, as a standard action. Alternatively, if Jim has CLW on his spell list, or has a good UMD, he may opt to pay 60TP for 50 uses of CLW as standard actions, that can be applied to others by touch, as per a wand.)
-Talent Points equal to BONUS*BONUS*200 may be paid to gain a +BONUS enhancement bonus on all weapon attacks and damage. This includes natural weapons and unarmed strikes. This does not include melee touch attacks, nor ranged touch attacks/rays. This is limited to a standard enhancement bonus, with a maximum of +5. Weapon magical special abilities can be applied to weapons normally, but without needing a +1 first.
-Talent Points equal to BONUS*BONUS*80 may be paid to gain a +BONUS enhancement bonus to any armor worn (or clothes otherwise, with an effective armor bonus of +0). This is limited to standard enhancement bonuses, with a maximum of +5. Armor magical special abilities can be applied to armor normally, but without needing a +1 first.
-Spending Talent Points can be done at any time and normally takes 10 minutes of meditation. Doubling the TP price reduces the time to instantaneous. In addition, if the item has an activation required, this can be reduced to instantaneous by doubling the TP price. All TP price increases stack with each other. Hence: Jim could be at 5 HP, and hit for 8 points of damage. This would normally take him to -3 HP. If desired, however, he could spend 16TP to instantly gain the effects of a Cure Light Wounds potion. This is calculated as follows: CLW potion is normally 50gp thus costing 4TP normally, he wants to spend his Talent Points instantly thus incurring a price doubling (up to 8TP), and he wants the effect to instantly go off which doubles the price again (16TP).
I'd like to hear people's responses to this, as I've wanted to implement this for quite a while in a future campaign. I think it's fairly balanced against normal Pathfinder, yet solves TCTE as well as shoring up some minor issues I personally have with the system as-is. Just to note, that PCs will still get gold and items (though much less), and can still buy or use magic items as normal. However, due to the inherent scarcity, I'd like to think they'd become much more attached to the few items they do have.