I would argue (once again) that part of what makes a game fun is the risk involved. Yeah, it's gonna hurt to die, nobody likes to be killed and take the consequences of the risk. But that's what makes the rewards all the sweeter.
I get that there is a certain segment of the population that LIKES to play without a death penalty. However, MOST people do not, they find it boring and pointless (in support of this argument I turn your attention to other games that have tried the "no death penalty" route. The only two active ones that I know of are children's games (SIMS and that Disney one). The one adult one that I know of that tried it failed miserably, Auto Assault). The "No Death Penalty" doesn't really work for most people, they need to have a certain amount of fear (for lack of a better word) to keep things interesting. That's part of the fun.
Now, what has happened with this game is that once you hit 14, there is no death penalty. And everyone who is in the "pointless and boring" camp got bored and left. What we have remaining (and I know I'm generalizing, it doesn't apply to everyone) is the camp that LIKES the no death penalty situation. That's why there is such vocal oppostion to this, I suspect. Everyone who was here who would have been in favor of this system is gone. They left long ago.
So the question is, given that, is it wise to antagonize the group you have left and implement one now? I would argue "yes". Yeah, some people will leave for other games (where they are going to go I have no clue, since there is no non-trivial game that doesn't have a penalty in some fasion). But in order to bring in a new population (and keep them), you need to have that penalty there to keep things interesting for them. The population of this game is NEVER going to rise with the system we have in place now, at best it would remain stable. By giving players a certain amount of excitement (in the form of risk) at the cap, we can keep more of them around than we would otherwise, and this game has a chance to actually increase it's population levels.
Yes, it will change how this game is played, to an extent. I honestly don't think that's a bad thing. The LAST thing we need is more people sitting bored at the cap.
Anyway, that's my argument
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