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I've been thinking about this for a long while, and I have been trying to think of what makes a good villain for an RPG. I keep looking at movies where I think that the actor did a good job in portraying a character.
I have come up with two conclusions based on the movies I have thought that the villains were awesome in.
First, I think that villains with morals that connect with humanity would be a very good villain because it allows the PCs to connect with the villain and believe that he is not so evil.
The villain I connected this to, would be to Ed Harris in The Rock. He played a character that was not evil, and his motives were justified through a very strong line of 'this is wrong'.
The next one is to have the villain make a direct off-shoot from humanity to where the PCs need to be, 'this guy needs to go', offering an opportunity for a good bad guy. His morals need to be different from humanity as a whole, and he sternly believes that his morals are more correct than everybody else.
This was based off of Heath Ledger's Joker. Heath's Joker was different because he was unpredicatable, and you could never know what he was going to do next, except that he was psychotic.
What do you think of these, I think I am missing a crucial element somewhere, hopefully you guys can spot it.

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The most important rule is to remember that everyone is the hero of their own story. If you have a clear definition of the character's personality and goals, it becomes easy to portray them in a believable manner while being opposed to the party.
Even the Joker wasn't a one dimension killing machine. He is completely amoral individual who is so bored with mundane existence that he is trying to impose his view of the universe on everyone. He doesn't plan, but he is trying to corrupt or destroy anything he comes into contact with, because it is fun and because he wants other people to share his madness.

Gargs454 |
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Well, I think there are a few things that can make for great, memorable villains.
1. The villain has a purpose with a seemingly logical reason behind it. In other words, the villain doesn't want to simply destroy the world. Destroying the world, in and of itself, doesn't really accomplish much since the villain is also destroyed in the process. Destroying the world in such a way that the villain can godhood and usher in the new world created in his image; on the other hand, changes things.
2. The villain needs personality. He needs to be more than just a stat block. A guy or gal that the PCs just love to hate. This can work especially well in conjunction with #1 above. Or, he may not even be a guy you "love to hate" but can even be the guy that everyone kinda likes, but who is completely misguided (see your Ed Harris example).
3. He needs legitimate means of becoming a recurring foil. He needs a method to escape, or to be sufficiently higher level (though not too high) than the PCs that while they can bloody his nose a bit, they simply cannot kill him outright. Nothing will get your players relishing the next fight with the villain than the fact that they simply cannot defeat him completely. This also mixes well with the above points in that presumably your villain if he has a plan and personality also has a bit of intelligence (doesn't need to be Einstein mind you). So when he sees that the PCs have the chance to kill him, and thus ruin both his day and his plans, he chooses to live to fight another day.
4. Finally, using the above points, make sure the villain interacts with your PCs. He taunts them in combat, or he pleads his case to them. He doesn't strike first, but rather tries to talk the party down. Rationalizes with them, etc., etc.
5. Vampiric Monk. Best villain I ever came up with. :p

storyengine |
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Agree with all the above, but the difference between an archetypal good bad guy and the "best" bad guy is your players. The notion here is that an emotional response from them makes the villain even better.
So, bad guy rules:
He should have beliefs, quirks and an agenda that you know your players will dislike (as well as their characters)
He has to get away a lot. You want him to repeat on your players like bad Chinese food.
A "lingering" affect like curses or spreading bad rumors about the PCs will make him hard to forget.
He should kill or subvert some lovable NPC (innkeep, horse, whatever).
Evil voice - sardonic and sarcastic like Jafar from Disney's Alladin or harsh like batman; it doesn't matter. What matters is that its memorable and distinct.
Catch phrases and calling cards are always a nice touch. Maybe he leaves tarot cards on the people he kills, or sarcastically encourages the players during combat.
The point about being able to identify with his POV is important. A bad guy with a believable or easy to sympathize with agenda will be harder to trivialize.
IF/when he dies, have his body be stolen. The idea that he could come back or wasn't even really dead will drive the PCs wild.
************
Example:
Hardig Straw married for love. When the magistrate came to collect taxes he didn't have, things got out of hand and he and his men killed Lady Straw, and pinned her murder on Hardig to escape the blame. They hung him on the spot, filed their falsified reports and drank away the memory. A year and a day later, Hardig's grave is empty. He has risen again as a very angry revenant with a horrible voice from where the hangman's noose crushed his larynx.
Through the player's lens however, the village is being plagued by an unusually brazen gang of bandits called the Strawmen, led by a mysterious an ruthless fellow called the Deadman who seems bent on seizing innocent women to use in unsavory rituals. He leaves 100 gold pieces at the site of these woman's abduction, and the few who escape usually have severe cases of grave rot disease.
The knight's men claim to have captured and killed the Deadman several times, but apparently he is more resilient than they thought. Anyone who has met him is afraid to speak, but all agree that he announces himself with "I come for the tax", which strikes fear into the peasantry on several levels.

Petty Alchemy RPG Superstar Season 9 Top 16 |

As with all things, consult TV Tropes. A few of my favorites:
Card Carrying Villain
Affably Evil
Villain on Life Support (This was a great one in a game I played in. We got through the cult, defeated the dragon, but the villain couldn't even move. No mighty magical assault, no tricks left, he was just sitting there. It's hard to kill someone who is left completely at your mercy.
Here's the index though, a good read.
Vampiric Monk. Best villain I ever came up with. :p
Yeah I love tossing Vampire on baddies. People usually only make humanoid vampires, but the template can go on monstrous humanoids or fey. I had a Dryad Vampire that was a lot of fun.

Diekssus |

It often really depends, every type of villain has its benefits. It really depends on what kind of journey you want your players to have.
Fighting the typical "ancient evil" can be just as fulfilling as a villain with whom the players might empathize or relate to.
It is however a very different journey. The latter more often a more personal journey where the players morals and preconceptions are challenged. and the latter with the challenge of overcoming insurmountable odds.
I personally like both of them, although those that focus around an ancient evil seem most easy to run ;)

pennywit |
At my table, my best villains -- that is, the ones that my players loved to hate:
* Had distinctive, memorable personalities and outsized attitudes;
* Were tough to kill, but tended to flee when they were losing a battle;
* Had agendas;
* Have at least one appearance where they clearly overmatch my players, forcing a retreat;
* Appeared several times, leading up to a final confrontation wherein my players finally had a chance at victory; and,
* Were French.
That last one I kind of happened into. He was already a really proud guy, and just for fun, I gave him a French accent. My players really, REALLY hated that guy.

CLufaS |

One the particularly hated NPC villains I put my weekly players up against was a an assassin named "The Hound". He was a sadistic LE Cleric bent on toying with his quarry over a long, exhaustive pursuit. His use of divination spells and minor wonderous items meant that the party never knew what to expect even though he kept a standard stock of utility spells. In between their skirmishes he'd have couriers send the party messages mid day as they moved through the city. He let them know often, that he could take them out whenever he liked, he spread rumors about the party and soured business deals. Everything escalated as they kept trying to track him down from minor griefing to muggings and explosive rune traps on their inn doors.
For a while they put up with the harassment, always vowing that next time they'd get him. There wasn't really a drive though, he was an annoyance and he gave them XP with their encounters. That ended after their Atomie companion Merisadd who'd been developed with them for roughly 7 months OoG time was abducted. When I say they turned the town upside down in their search there's no exaggeration. She'd been pinned to a board and left for the alley cats, then raised as undead so they couldn't bring her back. Righteous fury from a fairly CN party is unique in that they don't play by anybody's rules. They spent 3 sessions and a considerable portion of their funds rooting him out. The fourth session was a tooth-and-nail fight, followed 'enhanced interrogation' that revealed he was doing it for money but mostly the lulz. They melted 400gp and poured it down his throat.
So you can have puppy-kicking evil and play it straight. Just give it nuance so that this particular bad guy is going to stand out in his actions.

Mark Hoover |

I think part of the villain has to flow from the players too. Not the characters mind you, but the players. Find out what they dislike IRL and what their motivations are. If you have very politically liberal players for example, having a villain who was trod on by the man and now returns to commit acts of anarchy may resonate.
The thing is, your players have to be willing to hear your villain. Not just listen to the guy's rants but really HEAR them. If your players just want to play a game that's just barely not a board game, chances are you're not pulling off a memorable villain.
Finally you as the GM have to have the chops to pull it off. When you're playing the villain you have to make them live and breathe at the table. When dropping in hints and rumors of this villain or inserting the aftermath of the villain's actions such things need to be well delivered.
I've wanted to run a low-level game with a villainess who is nothing more than a CN female human (shapechanger) adept 4. Poor Vanya is just an odd girl, an outsider who lived alone in the woods with her father. She has always envied the girls in town and wanted to be pretty, like them.
Growing up in the woods Vanya spent many nights slipping away to sleep in the moonlight. She heard voices there that calmed her. Her father warned her not to trust the faerie folk but they whispered promises to make her beautiful so she lingered.
Finally when she turned 16 Vanya blossomed. She developed into a pretty young girl and wanted to be among the other girls at the faire that midsummer. She begged her father and he agreed so she made a special dress and sang all the songs the faeries had taught her (adept spells). She and her father went to the faire and Vanya was up with the other girls, coming out to the town now as young women for the first time.
Then the boys pulled the chord. Then Vanya fell under the stage. Then she met the rats.
So Vanya's father took her home. She fell ill with the fever and he went to get a cleric from the town. Vanya wandered into the forest and went to where the voices sang. She begged them to make her better; she pledged anything for her revenge.
Her dark patron rewarded her pleas with a curse. Now poor vanya is a wererat. She has transformed several of the other children into rats with her new powers. She is no mastermind; rather she is a frightened child at once vengeful of her peers and guilty for her actions. Unfortunately her patron has some larger purpose so she must continue plaguing the town.
The PCs then are made aware of Vanya through her father. She hasn't returned home and he just wants his little girl back. There are boys and girls missing throughout the countryside; rats are spreading an epidemic of Filth Fever; the fey have turned spiteful and mean.
This would be a real challenge and I don't think I've got the skill to pull it off. Still, I think it would be really satisfying just to see the look on the players' faces when they get to the final fight where they find a poor teenage girl sobbing "I just wanted to be pretty... to have friends... but they... they TOOK that from me! They stole EVERYTHING! I just wanted it back... I'm so sorry..."