From:
http://forum.square-enix.com/ffxiv/threads/277
"Players can never fail to attach the first piece of materia. However, the success rate progressively decreases with each subsequent piece of materia. A failed attempt to attach materia will result in the loss of all items involved in the process, barring the key item."
I don't know if any of you played AION, but let me tell you a little about the slotting system in that game, which the Materia system is based on. You have a piece of equipment with 4 slots. You go out and quest/hunt for maybe 2 days and then vendor your items and sell rare items on the auction house. You then have a million units of currency, which you spend on Materia gems. You then slots these items into your piece of gear, losing all your gems in the process due to the fail rate. Congratulations, all of your wealth from the last 2 days is gone, and your gear is worse off than when you started.
This is what's coming to FFXIV, and I would humbly request that we remove failure rates from the system and instead implement a bonus for those hardcore enough to grind the wealth and gems needed for what, 15-20 slot attempts?
Let a piece of equipment contain a limited amount of surplus attempts (20?) that is reset by purging the gear. Further materia slot attempts have a chance at boosting the stats of the piece of gear, plain and simple.
Or maybe just a casino where you can pay the 15 million gil and have your materia slotted all at once to save you the time.
Either way I'm sure there will be some good ideas to prevent casual players from having to run around with only 1 materia slot filled because they already learned once that you don't even try to slot the 2nd materia. My memories of the Materia system from FFVII are so pleasant, I don't want this frustrating system to become a part of FFXIV and drag the name down.