Pain is necessary for human survival. It warns us when we're in danger of injuring ourselves and alerts us when our bodies sustain damage. People born without the ability to sense pain, a condition known as congenital analgesia, have a severely reduced lifespan. As children, they bite pieces off their tongues and suffer cornea damage from pieces of grit they can't feel. Broken bones and infections remain untreated for long periods. They scald themselves with hot water. Their brains have no sensory connection to the flesh they're putting in danger - in this instance, they're just like videogame players.
One of the difficulties in designing games is communicating information to the player with a reduced range of senses. While players can see and hear the same things as their character, they don't share the visceral sense of touch. Partially, this is a good thing, since it encourages the player to take risks they never would if they shared nerve sensations with their character - running through fire, for instance - but it also means designers have to find creative ways of communicating pain, injury, and physical strain in order to influence player behavior. This leads to a blend of art, game mechanics and neuroscience that you've probably never noticed consciously - though it was pulling your brain's strings the whole time.
Originally, videogames represented character health mathematically. The classic Life Bar is literally a graph that tracks the extent of a character's injuries. Whether it's Street Fighter's brightly-colored meters, the iconic hearts from the Zelda series, or even hit points expressed as a fraction, the point is to quickly explain to the player how close they are to death. Hit points and health bars are the perfect tools for games that involve strategic play and husbanding resources. They're important for RPGs because they allow a player to calculate the risk and reward of using certain stat-boosting items. Fighting games need them to accurately communicate which player is winning at any given moment. However, the problem with statistical representations of character health is that they don't convey a sense of character immersion or narrative. In most health systems, a character that's near death will look and act the same as if they have full health - a fact that depersonalizes the pain and injuries they suffer by boiling it down to numbers and graphs. By this measure, players aren't so much inhabiting the characters as they are controlling them.
Expressing pain and injury became more common when games started exploring the first-person perspective. After all, if a player sees what a character sees, shouldn't they also feel what the character feels? At its most basic level, designers communicate this using visual and auditory clues. Doom is an early example. In addition to a health meter, Doom gave players a picture of their character's face. Each time the Marine took damage, he grunted in pain and his portrait became bloodier. What started as a simple nosebleed eventually become blood from the eyes, cheeks, and hairline. When the Marine died, he died with a scream. Fast forward to today's FPSs and we find that these visual and auditory cues that originally supplemented the health bar have now replaced it. Run-and-gun action titles like Call of Duty opt for the regenerating health system because it both cuts down on the HUD and keeps the game fast and frenetic. Instead, the red mist and draining colors they use to indicate injury - not to mention tinnitus from grenade concussion -transmit the same message that real-life pain does: Get out of the line of fire. What these games lose in health bars, inventory management, and med-kit hunts they make up for in a more lifelike HUD and quick-time pacing. Essentially, regenerating health simulates pain but never actual injury.
Horror and tactical games, on the other hand, are willing to slow the pacing though injuries and healing systems, since these can be powerful tools to influence player behavior or create a sense of dread. Metal Gear Solid 3: Snake Eater had its neon green healing menu, where the player had to treat injuries in the field as part of an inventory management mini-game. Broken bones required splints and bandages. Open wounds called for disinfecting, staunching and bandaging. Players that failed to treat Snake's wounds had to deal with a reduced health bar. The player's limited medical resources ultimately directed their approach to combat - while you certainly could take patrols head-on, doing so quickly ate through your bandages and splints, reinforcing the tactical, stealthy approach the series made famous. Call of Cthulhu: Dark Corners of the Earth used a similar injury system, but instead of enforcing a play style, the broken limbs and gashes served to enhance the game's sense of anxiety. Call of Cthulhu's Jack Walters is fragile for a videogame protagonist, even one from the survival horror genre. A Tommy gun or Deep One's claw could maul multiple body parts of his body, not only damaging his health but hampering gameplay. Broken arms kept Jack from being able to aim straight, or in extreme circumstances, even lift his weapon. Snapped legs reduced his movement to a lope or a crawl. Untreated cuts to his chest and head would eventually cause Jack to bleed out. After a gunfight, a wounded Jack might stumble hundreds of yards searching for medical supplies only to drop to the floor dead of blood loss. Also, while players controlled medical treatments through a menu, Jack applied the sutures and bandages in real time, meaning healing during combat was a desperation move.
These design choices had a striking effect: Call of Cthulhu made me terrified of firefights. Not only were they dangerous because I was always outnumbered, but even a lone Innsmouth townsperson could tear me up so bad that, even if I survived, the next encounter could easily finish me off. (And that's before you hit the actual monsters, and assuming you even had a gun - for the first third of the game you're unarmed.) All this reinforces Jack's helplessness in the face of forces much more powerful than him, leaving him with few options but to run and hide. This type of healing system can also create emergent narratives, as overcoming untreated injuries and fighting against the breakdown of your own body becomes as much a struggle as facing enemies. But in addition to this, the game really made you feel Jack's injuries.