Player types:
Innocent
Criminal
Faction Member

Basic Gameplay in regards to types:

By default players are innocent civilians. If a player commits a crime, stealing from a player or grave robbing amongst other potential crimes, they are flagged as criminal. Initially the time of being flagged criminal depends on the offense, but if you continue to commit crimes on a regular basis this duration can increase and become quite a hindrance to your safety in the world. Commit crimes at your own risk!

Players can join one of three factions. These factions are all against each other. Opposing faction members are able to be attacked without any criminal penalty.

No player, unless flagged criminal or a member of an opposing faction, can be attacked by another player against their will. If you do certain activities to put yourself at risk, that is your responsibility, but by default all the innocent players need to be wary of are thieves. No free for all PvP, no outright murderers. If a criminal is attacked by an innocent player, that criminal and that criminal alone, is able to retaliate and defend themselves. Use of Area of Effect abilities must be used with caution as they will affect criminals by default.

In free for all PvP games I can understand how full loot can be detrimental to the enjoyability of the game. You suit up as a regular old innocent Joe and go off to hunt only to be promptly murdered for your belongings/out of spite/general douchebaggery. Now, if murdering(FFA PvP) is not in the game, does full loot(inventory and equipped) become more agreeable?

I've got a few questions:

Each player can join one of three factions. Is this optional (ie, can you remain neutral)? From what you said above I'm guessing you can remain an 'innocent' and not join a faction?

Factions are all against each other. So if you join a faction you can attack anyone from either of the other two factions?

How does someone first become a criminal? You said grave robbing other criminals, but someone needs to be a criminal to start the chain. What do you mean by stealing from a player? You can freely attack an opposing faction member, but if you try to loot anything from them then it's considered stealing? or is it that you have an option to sort of 'pickpocket' from people?

I've got a few questions:

Each player can join one of three factions. Is this optional (ie, can you remain neutral)? From what you said above I'm guessing you can remain an 'innocent' and not join a faction?

Factions are all against each other. So if you join a faction you can attack anyone from either of the other two factions?

How does someone first become a criminal? You said grave robbing other criminals, but someone needs to be a criminal to start the chain. What do you mean by stealing from a player? You can freely attack an opposing faction member, but if you try to loot anything from them then it's considered stealing? or is it that you have an option to sort of 'pickpocket' from people?

You can remain neutral, aka innocent, yes. Neutral/Innocent players are unable to be attacked, if they take action to put themself at risk, that is their own doing, not forced on them by other players.

Correct, FvFvF, any faction member is free to attack players from opposing factions. This is as close to FFA PvP as the game will get.

Grave robbing, in the case of full loot, would be taking items from the corpse/"grave" of an innocent player. If a thief is killed after stealing an item the hope is to have a system in place where the killer and/or victim of crime/theft would get first dibs at the criminal's corpse. If you loot the dead thief as an innocent bystandard, there is potential for flagging them as criminals as well. This would be to avoid friends of thieves from remaining innocent and clearing out their corpse before the victim/victor can. For Faction players you are free to loot opposing faction players without commiting a crime. The "spoils" of war so to say. Looting members of your own faction will be considered a crime, but a player can consent any other player in the game to loot their body for them. Developing a mechanic for ease of consent will be critical, but to allow blanket inter-faction looting without becoming a criminal does not seem wise at this time, but it is an option. It is a very delicate balance of freedom of play and limiting unintended/undesired behaviors.

Stealing is the actual act of trying to take something directly from another player's backpack. If you snoop, people will get offended if they catch you and they would be wise to avoid you. If you snoop, see something you want to try and take and attempt to steal it, you become flagged a criminal for the attempt, successful or not.

I think this could be made to work. Criminal flags are a good mechanic, but you have to balance them out so it's not such a big punishment that people will never commit crimes. There has to be a situation in which committing a crime is a good move, beneficial to the criminal, or else it becomes an obscure rule that's only used to bait newbs: "Hey, newbie! Come grab this health potion out of my backpack, you can use it to heal yourself!" *Chop* If you're going to make crime a bad idea, just make it impossible.

As for factions, they'd have to be balanced such that they're good for something but not essential. Say certain resources are more plentiful in certain faction zones, making trade between them lucrative, but only available to neutral players who can go to each faction's territory without being killed on sight. The neutrals have the opportunity to build wealth easily, while faction players have the security of their perimeter defenses and access to the high-level goods and services that the faction reserves for its trusted members. Factions would have to run raids or deal with neutral traders to get the materials they can't harvest in their territory.

The concept as put here is an open world akin to Ultima Online, not modern MMOs. Raids won't exist, but people can go "raid" dungeons. People can go "raid" faction areas. Running instances is not part of the game in any way.

Looting another player's kill could also constitute a crime. Criminals will do it out of greed/another way of playing the game, not because it is actually intended to be easier in any way.

Factions will be able to control fortified structures in the NPC cities. If they control the structure it is as if they control the city. They have a defensive fallback position and can patrol the city to keep the external defenses more secure thus solidifying their hold on the area. Percentages of goods sold in the city is a possible incentive to fund faction wide efforts. Faction members can also build their homes together and create their own territories outside of NPC cities as well.

When I said "run raids", I meant raid the warehouses and stockpiles of the people who are able to harvest the materials they need. I was thinking that each faction would have one resource they could get easily, and the other two resources would be harder to get in sufficient amounts, requiring either amicable or hostile acquisition of goods from the other factions. Neutral players could run caravans and make a profit shuttling goods between factions, but if you want to get a lot in a hurry and not pay for it, armed robbery becomes the go-to method.

Ah, factions can lose control of the NPC city strongholds. They aren't a permanent control scheme. Factions would each have one primary stronghold that is their "origin" and cannot be lost to other factions.

The NPC city faction strongholds will have deposit only capacities where faction members can earn points for donating to the cause of their faction, but withdrawals are not possible to keep members from stealing from their own faction. The system is still in need of development for distributing the resources to their intended purposes or it could end up just being a donation "drain" system to remove materials from the game world. A "need for upkeep/repairs/etc" rate could be established that would cover the consistent needs of a faction that helps establish the NPC power of a faction. The more goods, the bigger and better defenses could be, as well as more funds towards employing guards to defend your territories, that sort of thing.

edit: didn't realize it was to specific game mechanics rather than general ones. a little more derail-y than originaly thought.

The problem with flags is that the player does not "see justice". The victim doesn't get any feed back of the inconvenience or loss that that a criminal receives from their action.

I would rather aim for a modified scent system from haven and hearth, original: http://havenandheart...com/wiki/Scent.

Basically I would allow the victim(innocent or factioned player) to collect 1 scent from their death if there was nothing looted, 3 if anything was. The victim would then be able to do whatever they pleased with scents(trade, use themselves). Now I would require people to be a part of a faction to perform criminal action. From that point I would give every faction "inner chambers" where scents could be used for compensation(take a selection of items or steal experience) if you get past defenses. Further give factioned land a defenders advantage where defenders don't produce criminal scent and have NPC aid.

The advantages of the system would be that you don't need factions to "always" be at war with each other in any official amount, players will choose for themselves where and what conflict will be about with tensions slowly rising as criminal acts create more and more tension(tension could even be lowered politically by trading each other's factions scents back). Players are also forced to think about all criminal acts because revenge has the potential of eventually striking back at them, victims know that the karma is out there and someone is waiting to collect(they might even make a profit by selling scents). The system also ends up to be pretty robust if kept simple, for instance you could have two factions in the same sphere of influence(criminal acts performed outside their spheres) and probably a few messier things.

I think full loot can work out fine, if...

• There are safe areas that are clearly marked as safe. Dangerous areas are clearly marked as dangerous.
  
• Items you store in storage somewhere are guaranteed safe, so if you venture into a non-safe area with valuable items, you understand you are taking a risk.
  

These might also help:

• If you can specify one item to make sure you never drop (An item "bound" to you). You can change the bound/secured item whenever you want in your inventory.
  
• If, when someone kills you, you have a icon over that player's head that lets you know 100% where he is (even from a huge distance, and even visible on the game map), so you can get revenge if you want (which adds a little more risk to PKing).
  

In a ORPG I was once a part of, ages ago, we used the following system (with full loot):
Light-blue named areas were guaranteed friendly.
Grey named areas were friendly if you weren't in a guild, and PvP if you were in a guild. (Allowing players to "opt in" to extra PvP areas by joining a guild).
Red named areas were dangerous, and always PvP.

Yellownamed players were always protected (even in red areas), and couldn't PK or be PKed (For us, I think it was under level 7).
Allied guilds would see other players in either guild with light-blue names (Can never be attacked).
Enemy guilds would see other players in the other guild with red names (Can always be attacked, unless in light-blue areas).
Non-guild players would have grey names, and players from the same guild would have white names.

[hr]

One situation I'm wondering about what you outlined above... what motivation and rewards would I get, to remain factionless? If all the rewards and motivations lead people to join factions, everyone would join one, and there wouldn't be any innocents. I think innocents should, at later levels, be harder to play, but with greater strengths and benefits.
I also think each faction should have different strengths and benefits from the other factions.

The best PvPer games I've played(wurmOnline, Haven and Hearth, and EvE(to a much lesser extent)), you always had more at risk than just your inventory. You had at risk your territory and your storage. Such risk forces players to weigh the advantages and disadvantages of actions. Normally even having more 'hardcore' PvP actions actually resulted in a far more civilized community, if you could say such a thing in an MMO.

Normally what people think about when someone declares 'loot and PvPers' they think of that one person who is allowed to go sociopathic, minimize risk, maximize DPS(with character not designed to grow in anyway, while having almost no repercussions due to character design). This is what turns people off from open PvPer games, and what you are fighting against as a designer if such a game is not your goal.