Bad idea. Period. The way they design this game to take time and effort (And I'm not talking about getting one class to Lv50.) to progress anywhere I think having a "one life, you're history" deal wouldn't be in the game's favor. Nobody would want to risk the very hard content, newbies would be immediately shunned, and I rather question how cooperative the community would be. In order to make something like this work they'd have to:
* Make it easier to level up than it is now.
* Increase drop rates and simplify crafting even more OR make all items as drops.
* Drastically change the combat system to be more in line with dodging attacks, means to be evasive.
Now I know people will point out how east it is to level a DoW/DoM class or job to 50. It's "easy" because you can get a PL, but who's going to PL you in a "you die, your character's history" setting? On the plus side it means either know your job or enjoy playing the game over and over again from the start. Hope you like your weathered gear. Taking one class to 50 might not be much but what about if you want multiple 50's? And crafting? Let's go spend months working on a Lumiary, die in battle due to lag, and then lose all that progress! Yay!
And while FFXIV's community isn't bad, it's not quite like other MMOs out there. These kinds of servers would only promote elitist attitudes, QQ-fests, rants, and generally be more of a headache for the devs than what they are now. Think the forums are bad now? Picture this being added in and the flood of complaints because someone hit a "patch of lag" or something causing death, and now all that hard work is gone. Bottom line, the combat system isn't really designed for permanent death scenarios. It would take more effort to modify the system more than it is worth. Might work in other games, but not here.
EDIT: And though this isn't meant to be in a douche-like manner it will probably come across like that so I'm giving warning now.
If you want a permanent death setting you've got an option you can do, and I applaud you if you'd truly be hardcore enough to do this:
* Play the game with the mindset that every time you die you have to delete your character and recreate them. There's no do-overs, no exceptions, no transferring items before deletion. You die, you don't hit "Return" or anything. Just log out, hit the delete button, and recreate.
* For added effect find at least 7 other players who would be willing to do this with you.
* For simplicity's sake, create separate characters for your crafting jobs. You'll miss out on certain content but you'll always have a character you can use to craft equipment on. This could be essential to keep your character's geared up and even have a supply of gil to ease the burden of creating a character over from death.


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