The negativity about M+ dungeons is honestly understandable to me, considering how it started as a simple game mode and turned into being a cesspit as bad as if not more than raiding itself in WoW. In fact, several of the points you listed are actual negatives to the concept:
"...but having harder content in general never hurts..."
Actually, yeah, it can if the content gets so hard that the majority of players struggle to complete it. ESPECIALLY if rewards are tied to it, because that leads to the community gating itself, people buying runs, etc., which makes even attempting to get into that "harder content" more difficult
"...more high-difficulty content that would force players to get better..."
And that right there is the crux of the problem. Many players want to enjoy a casual game for fun. They're not looking to find some external meaning to their existence, to get some shiny pixelated reward that can be shoved in others faces to show that "they're worthy". They just want to play make believe in a fun environment on go on simple adventures, which this game has been doing for over a decade now and doing it so well that they've had the largest influx of players that they've ever seen.
Seems to me that SE is already doing it right. Which leads us back to:
"Or are we really content with staying in our current cycle of dungeons never offering an actual challenge and we instead have to rely on Savage and a lesser degree Extreme?"
Yeah, actually, it would appear that would be the case (although 'actual challenge' is incredibly subjective), especially considering how immensely popular the game is now. Whereas competitors who have been striving to accomplish all of those "make the game hard, tougher, more intense and FORCE players to get better!!!" factors aren't doing as well.



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