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This tangent isn't particularly relevant. The point is, being able to stay in Kara and get better gear is silly but understandable now if you're not into 25-man raiding... it will be silly and pointless when there is a progression of 10-man content available.
My personal opinion on a reward scale is that, as a relatively casual-friendly game, WoW should always reward increased effort but that the rewards should suffer rather large diminishing marginal utility, so that 'hardcore' players will have an advantage to show for their effort but that advantage is not insurmountable. Like, twice the time/effort/skill/etc should net at 10-50% increase in power/loot/reward, but not double. As such, I think a combination of a hard lock-out on higher-tier rewards, plus a badge conversion rate somewhere between 3:1 and 10:1 is a good thing. You can run back content for faster gear progression, although it's not nearly as effective a use of your time. Players that want to put in the extra effort can, and they get rewards out of it, albeit small ones. The other good alternative mentioned above is badges for consumables (or gems or whatever).
However you go about doing it, I think it's important that every badge have a potential badge-sink, whether it's a higher-tier conversion or a consumable grocery store, or a badge casino or whatever.
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