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Hello, take what I say with a grain of salt because I haven't played the game yet

One challenging aspect of a 'death mechanic' is how to handle it properly. You could just revert to a save, but that is the mainstream of how death is handled and makes death sort of have no consequence aside from having to redo what you already did. You technically didn't 'lose' progress in the game because you just revert back to before you did it and can just retrace your steps to get it back.

A solution to this could be to be sent back to a starting area and losing items, this is also done in many games like in minecraft, terreria, and runescape. It gives death actual consequence, but something like this doesn't make much sense in a more story-driven game. The games I mentioned are more sandbox-like games where that sort of thing makes more sense, but there is a way to get around that limit, and it's by adapting the 'respawn/revive' mechanic into the narrative of the game, like in runescape it's loosely explained as simply 'it's not your time adventurer, return to life' and in bioshock there are actual reviver stations tied into the game. 

To throw narrative ideas, perhaps the player character gets into possession of some ancient artifact that revives them after they die, pulling their revived body back to where they wake up. Perhaps they come across a monster or some other supernatural being that is capable of reviving them in exchange for some sort of service, maybe they grow attached to the player or they need the player's help to escape too. 

I said all this because if you're still struggling on ideas for a death mechanic, I'm hoping this could help spur some ideas to help improve your game.

Thanks, I appreciate the suggestions. The game itself is going to be fairly story driven and narrative by the nature of being built in RenPy. It will use a lot of RPG style mechanics to guide the players to certain story beats. This ends up creating the issue I'm having where reverting to a previous save is overly punishing and tedious for the narrative side. But simply respawning is to lenient for the RPG side.

I'm currently still leaning towards doing a combination where the player reverts to a save location, and loses some items. Possibly add some kind of negative 'post death' debuff but I'll have to test that to see if it feels right or not.