Everyone at all interested in game design should read Sirlin’s series of posts on balance. He brings up just about every important facet of balance relevant to games in general. He uses mainly examples from fighting games to illustrate his points—they work great as examples of the concepts he discusses.
In this post, I’m going to summarize many of concepts Sirlin illustrates (you should definitely read his articles if you have the time). Balance is a critical concept in MMOs and certainly merits a post on this blog.
Strategy
A strategy is a planned set of actions. Every game has a strategy-space that consists of every possible strategy the game permits.

Some strategies are better than others. The best strategies dominate all other strategies. A strategy is dominant if it is always the best strategy to choose regardless of the state of the game—an expert in the game would always choose that strategy regardless of his opponent’s decisions and the expert would always win.
A strictly dominant strategy is always the best to choose. A strictly dominated strategy is never the best to choose.
There are different layers of strategy. In theme-park MMOs, there are character growth strategies specific to each class (the specific talent builds for a feral druid, a prot warrior) as well as in-combat strategies (a DPS rotation for a hunter or an aggro control plan for a tank). The order in which you complete quests is also a strategy. Each of these layers have different goals and optimizing one may necessitate choosing suboptimal strategies in others. MMOs are fun because there are a lot of strategies that allow us to succeed—success is almost guaranteed—so we almost always feel like we’re being smart players by choosing good strategies, even if our strategies are far from optimal.
Darkfall is a unique example of the strategy paradigm of character growth being turned on its head in an MMO. Any character, as of October ‘09, can max out every skill in the game. Every character is expected to be able to effective perform every role as the game is played now. Most MMOs necessitate character growth strategies that are essentially time-independent, because there is usually some limit to the character’s growth that is set by its class or a skill cap—character growth strategies focus on the character optimizing for a desired role when it reaches the limit of its growth. In Darkfall, all growth strategies are rendered moot in the long run. Every character is exactly the same given a several month span of time. The strategies that matter for Darkfall in its current for are those that optimize the instantaneous power of a character at all points in its life. This problem is significantly harder to solve, but it tends to be less interesting than endgame minmaxing. (There probably can only be one optimal growth strategy in Darkfall.)
Depth
Depth is the result of there being enough viable strategies for the number of possible strategic permutations to outstrip the player’s capacity to experiment with many of them in a reasonable amount of time. This results in an evolving metagame where certain combinations become popular.
Depth is, at its root, the result of asking a player to solve variations on a problem that is very difficult to solve. It’s not obvious to the player at any level what strategy will net him the best results, so players will try out many different strategies against many other strategies in search of optimal solutions.
For instance, assessing mid-game positioning in chess can be a monumental task as the number of possible moves grows significantly as the board opens up. Calculating the value of positioning vs material is a monumental task. Usually there is not enough time to come to a definite valuation, if one is possible. Chess has a lot of depth in that you can play it many times without seeing identical mid-game positions, so not only is piece valuation and position valuation a hard problem, it’s rarely the same between games. Different players put different weight on different ways of evaluating board position and material; the metagame of chess has been evolving for at least four hundred years and most players still struggle to gain a grasp on evaluating board positions and possible moves.
MMOs currently lack depth. The problems that a player must face when he sits down to play are severely limited in difficulty. Modern MMOs are mostly built to tickle players with rewards and those rewards are their primary motivation for continued play. If game systems had enough depth to rival the reward addiction, MMOs would be able to get over the Kosterian Curve of rapid adoption followed by devastating desertion.