This is a great video someone showed me once about the difference between extrinsic and intrinsic rewards playing video games.
Author did a mistake there… In WoW your grinding not to just get the items but to get items powerful enough to overcome next challenge. What’s wrong with that?!
Well, the idea that you need new items to overcome new challenges is something that is largely in your head.
Think of it this way, let’s say your gear power is a 3 on a scale from 1 to 10 and the encounter difficulty on a scale from 1 to 10. That’s a 1:1 ratio of gear power to encounter difficulty. If you get new gear and it is a 4 and your next encounter is a 4, then you still have a 1:1 ratio. The only thing that gets bigger are the numbers that pop up for damage, and the hidden hit points of the mobs you are attacking.
So, while there is perceived progression, there is really none. It is still a 1:1 ratio.
It doesn’t have to work just for 1:1 ratios either, you can have any ratio, but the gear largely has nothing to do with anything except making you feel more powerful. The only way you are more powerful is because in an MMO you compare yourself to the rest of the population. And, compared to the population, you are more powerful, but at the expense of creating a barrier for the lower population to enter “higher” level content.
What many argue should happen (and what GW1 did quite well) is to make content more challenging without the need for gear to increase. This not only allows you to avoid the common problems with power creep, but also to create content that new players can access so they don’t get discouraged and quit.
Basically, you don’t need better gear to make content more challenging or exciting, you need better content.