Players often feel like they have no control over their favorite MMOs, but the truth is every major design decision is made with them in mind. Developers listen to forums and every complaint and suggestion has a chance of changing the direction a game takes. Player Consequences is a new feature that follows some of the modern trends in MMOs and the player concerns that created them.
Item binding has become a fact of virtual life for most of us nowadays. We get an item, pick it up, and it somehow magically attaches itself to us like some kind of lamprey. We usually don't mind that much when we first get the item, but eventually we find something better. Then it becomes time to peel it off and sell. This is when we usually find out that the favorite item we worked so hard to earn is only worth a small pittance to the NPC merchant. It would be nice if we could sell it to another player or save it for one of our lower level characters, but most games don't allow this anymore.
You see, a long time ago back in the early and mysterious age of first generation MMOs, there wasn't really any reason for item binding. Oh some items might have a "required level" on them and some special quest rewards might be "no trade", but in general "bind on equip" and "bind on pickup" didn't exist. If you got lucky on a mob's loot table and won the Sword of Ultimate Uberness then it was yours to do with as you please. This usually meant that it became somewhat of a family heirloom and was passed down to every new character you created, much like that hand me down jacket from your older brother.
This went on until a player had no more use for the item; then sold it off via an auction house or bazaar. Eventually, as servers got older there were more and more Swords of Ultimate Uberness, but the rate at which they appeared was always very small. The reason for this is that most older MMOs did not instance their dungeons like modern day games. This kept the drop rate for quality items quite low since bosses were often on long respawn timers and could only be killed a certain number of times each day.
This worked fine in the days when MMOs had small audiences, but there were several problems that became apparent as games started to have larger player bases. As games like EverQuest became more popular, there started to be more and more complaints about sharing dungeons with other players. Players didn't like going to dungeons to find the spawn locations for all the good bosses already staked out. Fights and arguments were common, and the practice of training mobs onto rival groups was used by the more aggressive players.
Developers originally thought they could solve the issue with harsh attunement and key requirements for dungeons. This worked in the short term, but eventually a large enough group of players always gained access and the problems started again. Then some game designer doodling on napkin got the bright idea to create multiple instances of a dungeon. I first ran into this during the Lost Dungeons of Norrath expansion for EverQuest, but I know several games started using it around the same time. Instancing seemed to be the perfect solution to the dungeon crowding issues, which players were so vocal about on the forums.
Unfortunately, the use of instances for dungeons also increased the rate at which items entered into the game. Developers had to suspect that this might be the case, but I'm sure even they were surprised by the popularity of instanced content. It was around this time that multiple schemes for restricting the flow of new items into a MMO economy were created. Something had to be done to stop MMOs from drowning in a sea of newly created items.
Thus most developers turned to using item binding as a method for preventing item overflow. The old method of using respawn timers doesn't work now that most content is instanced. Making items "bind on pickup" greatly reduces the item flow into a game since it guarantees that not every drop from a mob will end up being useful for a player. Before item binding, an item that no one could use would have gone to an alternative character or been put up in the auction house. Now it usually can only be sold to a merchant or disenchanted as the case is in World of Warcraft.
Some players find item binding unfair, but it seems to be better than having the chaos of shared dungeons. In general shared content is more static since players aren't free to roam throughout the entire area. Most people find this less fun and don't like the problems that crop up when different groups fight over valuable boss spawns. The only positive quality for shared content is that it increases community building since players actually have to deal with one another.
However, after World of Warcraft started to become a runaway success, developers were less willing to use features that increased player frustration. This included features that supposedly built player community: like forced grouping, and shared dungeons. In fact a lot of new MMOs just started blindly copying features from Blizzard in hopes of achieving the same degree of success. Thus dungeons that were linear, instanced, and used item binding became prevalent in the MMO market.
A few games tried to ignore the effects of instancing by not using item binding and ended up destroying their in-game economy. Player crafters are simply unable to compete with the glut of items from instanced content and need item binding to survive. Some people think you could avoid a lot of these problems by not using instancing at all but that would be impossible because of today's market size. Most developers would be hard pressed to make a MMO which could even meet initial subscription numbers without using some form of instancing. It seems for now that we'll just have to suffer the shame of selling our hard earned gear for a pittance, at least until someone comes up with a better idea.
