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Ampersand68~4Y
The use of a stamina meter to measure both health and attack is something that reminds me of the game The Banner Saga- though in it, strength is not depleted as you attack, and the main dilemma is whether to prioritize Strength damage or Armor damage- as Armor blocks Strength damage and reducing Armor makes subsequent attacks stronger, but as you lower a unit's Strength, they in turn deal less damage (which is important so your own units don't take Strength damage to the point of being unable to hurt the enemy). It was an interesting addition for a Tactical RPG of its kind, and I wonder what depth a similar type of system would provide to a more traditional-style RPG.

Something I am wondering about though is the way you say progression will work- a slow grind of incremental changes. I don't think this is a bad idea per se, but it does still run into the same problem of balancing as regular levels do (with static stats it's far easier to tailor encounters to play out a certain way), and could encourage counter-intuitive strategies like purposely taking damage and in effect "penalizing" efficient gameplay.

It also runs into the problem of underutilizing certain party members and the resultant imbalance from that. There are ways for level-based systems to avoid this (like having inactive party members get token XP, or level ups applying to the entire party) that wouldn't apply to you system. On top of that, it's rather grindy, though grinding can certainly be part of the fun in RPGs.

Making it so upgrading skills or equipping items is the most important determinant to combat effectiveness could solve this, but only by making the experience system redundant. I don't think there's a completely obvious solution, and it may turn out that a "solution" isn't even needed, though I do have to question what this type of progression brings to the table vs discrete levels.
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Thinking about it further, I actually think that the idea of "shared Team XP" could be utilized in such a system, though in my opinion permanent stat upgrades would need to go for it to work- what I'm thinking of is a kind of "affinity" or "rapport" that builds as the team fights battles together, which could go up or down based on various factors, but would apply a bonus to the entire team's stats rather than on a character-by-character basis. This solves the problem of uneven progression, and could also be a solution to purposely grindy gameplay (by punishing a player for dragging out fights in order to train strength by getting hit over and over again, as getting team members hurt isn't going to help with team cohesion- perhaps team rapport could even be increased based on how well the battle went (though how that would be determined I don't exactly know). Having the bonus capped at some arbitrary amount could also help prevent grinding/unbalanced enemy encounters). I think this could fit better with the resource-management aspect of the Body/Mind bars as well- a fluctuating bonus seems more in line with that than incremental stat increases.

These are just some ideas off the top of my head, and of course it's up to your own discretion where you want to take your game's systems- though for me, one of my favorite things about the original MARDEK (3 specifically) was how you could unlock more dialogue with party members as you leveled them up, fleshing out their characters and providing a reward for using them aside from the obvious power boost. I guess that's why I thought of the rapport/affinity thing, since I do like the idea of party members slowly getting more in tune with each other, and the roleplaying opportunities that could arise from this (for example, story events massively affecting affinity levels*, providing a gameplay effect for plot-based progression).

*to take an example from the original games, Emela "killing" Steele could result in a massive loss of party rapport, though I don't think all changes would necessarily have to be negative- an emotional breakthrough between two party members might boost their affinity as well, perhaps even raising max affinity levels (though that'd be a whole other can of worms itself).
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Tobias 1104~4Y
This is something I definitely need to give more thought!

I want to avoid grinding as much as possible, and I was expecting people to reject the proposed system because of how much grinding it might encourage.

I dislike the idea of levels being completely segregated from story elements, though. In MARDEK 3, characters like Meraeador joined at a much lower level than Mardek because that made sense, I thought; it'd be ridiculous if this "I've never battled before" character was suddenly on equal footing to someone who'd been doing it for years! I would have made him level 1 actually, but players complained about the level discrepancy even when it wasn't enormous. I dislike XP going to non-combatants for the same reason; what's it actually representing, then?

I'd like to just discard levels entirely, and I'm even thinking about getting rid of random battles, and instead populating dungeons with a limited number of encounters such that it's possible to fully clear them. There needs to be some reward for finishing a battle, but if they're obstacles, then clearing them is a reward in itself, sort of. This is something I've thought about for years, and in an earlier game idea, you acquired new abilities by clearing out all the instances of a given monster species in a particular dungeon. I liked that a lot.

But it's tricky, because I know why level progression exists: it's appealing to players, to feel like they're growing. So getting rid of leads to a big loss that needs to be made up by something.

I'll need to brainstorm this before coming up with something for certain, and it'd be valuable to get feedback from players once I get to that point. I'm thinking the slow progression might not be the way to go about it though.

I'm unsure how I'll be handling the party chat. In Taming Dreams, there were no level-based backstory bits unlocked, but instead there was a more complex chat system where individual characters - and pairs of characters - occasionally got new optional dialogue based on the party state, which you were alerted to by a (!) that appeared in the corner and a sound effect. Writing bits for the current situation enhanced the immersion, but it also took ages to write. One possibility is a blend of the two - and something similar to what you're describing - where characters who take part in battle get affinity points for all the other characters present, and when they reach a certain point, it unlocks a bit between them... though I'm concerned about that leading to dialogue inappropriate for the current situation. Maybe the benefits outweigh any hits to the immersion though?

I've just added this to my notes, so I might end up doing something like that! Thanks for the idea!
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