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In other words, breaking an enemy's morale in an MMO is the worst thing that can happen. The routed enemy escapes without injury while his unimpeded buddies pin me down. Now I'm in a race to finish the battle and back off before a whole swarm of enemies sweep in and finish me off.
According to Clausewitz, "The activity in war is never directed solely against matter; it is always at the same time directed against the intelligent force which gives life to this matter, and to separate the two from each other is impossible." Yet in gaming, this seems to be exactly the case. Warfare in MMOs is only against matter (i.e. the physical properties of the enemy) since warfare against the moral factors only causes a broken enemy to increase in strength.
I can, however, understand the logic behind the current MMO programming. The premise is that someone who is morally broken by battle will eventually recover and be able to return to the fight. The problem is it takes only a fraction of the moral factors into account and compresses the recuperation time of the routed enemy, causing a paradoxical rule that "he who runs first, wins."
The solution to this problem is in four parts. The first is a lengthened recovery time for the enemy that flees. A few seconds of flight and then a return to the combat is far too quick. Furthermore, the enemy that returns to an ongoing combat should have reduced morale. In other words, they are liable to flee again and, while they stay in the battle, their attacks are less powerful.
Second, an enemy that breaks and flees should have a moment of vulnerability as they turn to run. Whether this means a free shot against their back, an increased chance to hit, or increased damage may vary, but it must be significant because in that moment they are at their most vulnerable. "The most decisive losses on the side of the vanquished only commence with the retreat."
Additionally, there must be repercussions for companions who remain in the fight. Their morale is shaken by being abandoned by a compatriot. They should be more prone to breaking themselves and their attacks should be less focused, meaning they have greater difficulty hitting and inflicting damage.
Finally, the specific effect should not be concrete. As I introduced at the beginning of this article, the impact of moral forces on a battle are vague and impossible to fully quantify. In some fights, morale never breaks, while in others the impact is more or less severe.
Ultimately, the result of someone fleeing from a battle should result in a positive advantage to the victor rather than the vanquished.
Citation for all quotes: Clausewitz, Carl. On War. London: Penguin Group, 1968.