Let's talk about level up mechanics in forum RPGs.
Character Advancement, and Player Reward Systems:By Solifuge
Many games rely on Character Advancement and Increasing Difficulty to create a sense of direction and rising tension in the game. This taps into the basic human desire to collect resources and improve ourselves, and makes us enjoy putting time and energy into games. Character Advancement is a player-reward system at it's base, and can be done in a number of ways depending on the nature of the game. Consider what sorts of behavior you want to encourage in your players, and build your reward system around that.
Question 1) What behavior is being Rewarded?Reward Time Spent:Some games reward players based just on time passing, either in the real-world or in game-time. Players may earn bonus skill-points every time they participate during a day, may accumulate currency or resources automatically even when not playing, etc. This is good for games that represent a long-term commitment such as strategy games, games that support intermittent,, short play periods (online board games), or games where you assume the characters are always working or training even when the camera isn't looking at them. The rate of reward (how much they earn, or how quickly they reach the time-threshold required) can be variable based on character traits, the number of Training Facilities built or Tomes of Knowledge collected, etc. Examples would be things like skill-training in EVE Online, League of Legend's "First Win Of The Day" Bonus, or even Minecraft's Agricultural System (provides food passively over time).
Reward Success:To encourage a certain style of play, many games reward players whenever they do a certain action successfully. Combat-focused games reward players based on combat victories. Exploration-focused games may reward players based on seeing new regions or locations, or finding artifacts and objects that help them improve. Narrative games may reward players based on participation. When combined with steep difficulty, this can be used to create an addictive "Try Again!" atmosphere, where players work to perfect their strategies and play-style. Examples include most role-playing games, shooters, strategy games, etc.
Reward Skillful Play:Similar to rewarding success, other games reward players based on the quality of their performance in-game. Players may earn points based on accuracy and avoiding mistakes, bonus goals such as sneaking through the mansion without being discovered, coming up with clever or unexpected ways to defeat enemies, quality role-playing and narrative contributions, etc. This tends to create more competition between players in multiplayer games, as players struggle to outperform others.
Question 2) What form do these rewards take?Currency and Point-Buy:Players earn points, which are exchanged for the reward of their choice. Currencies can be abstract or tangible; Experience Points that players trade for new skills and abilities, material wealth that players use to purchase equipment, allies, resources, etc. This allows players more control over how they advance in the game, and finding ways to maximize their potential can becomes a game in itself. Some games allow players to lose their points, or even the rewards they've bought with them, to discourage other kinds of behavior; taking unnecessary risks, failing to succeed, dying in combat, long-term absences, etc.
Pre-Defined Rewards:Players complete a milestone or action, and earn a set reward. Perhaps this involves winning a combat, completing a mission, rescuing a skill-trainer from the Dungeon, gaining 1,000 XP, etc. Players may know what their rewards are ahead of time (+10 HP, +1 Strength, and 1 new Fighter Skill!), which helps set up their expectations, and dangles a carrot for them. Alternatively, they may just know what they have to do, but have no idea what the reward is (Beat the mini-boss and collect the dungeon's Artifact, which will grant you some kind of new ability). Removing player choice from character advancement via pre-defined rewards has benefits; it simplifies and streamlines the game, increases its accessibility, and helps players focus on other aspects of the game.
Non-Personal Rewards:Particularly in cooperative multiplayer games, or games where death and starting new characters is expected, you may consider players earning rewards not for themselves, but impersonal rewards that benefit the group. This may be a communal point-pool or collection of gear/materials/wealth that all players draw from. A good example of this would be X-Com's Research/Equipment-based advancement, which can be earned by strong Veteran performance, and passed on to Rookies when they die.