While Mass Effect 2 is getting plenty of good press, one of the main objections against the title (from fans of the original) is that the leveling system has been stripped down to nearly nothing. You have less than half as many powers and abilities in which to invest, and their individual skill ladders are a modest four steps high instead of twelve. It's still got the Mass Effect story, but the gameplay is something from another genre. It's hard not to notice that the game looks a lot less like a traditional RPG and a lot more like Halo, Gears of War, or Modern Warfare 2: Get behind a box, then pop up to shoot guys in the head until you've saved the world. It's easy to see why BioWare might want to take a step in this direction and court these action-oriented gamers. These games have a huge audience and sell a ton of copies.
This isn't new territory for BioWare either. In Jade Empire, the leveling system was so thin that it made only a slight difference to the performance of your character. You could ignore the leveling system entirely and the game wouldn't be that much harder. Then Mass Effect came along with deeper leveling and looting. Then Dragon Age showed up and they made leveling even more important, and also threw in a crafting system. Ignore the leveling system in that game, and it would likely be near impossible. Now with Mass Effect 2 they've returned to their earlier minimalist approach.
An example of the gameplay they left behind: There was a trick you could do in Knights of the Old Republic where you would deliberately avoid leveling up for the first couple of hours of the game. Normally you'd get to about level eight or so, and then get the ability to become a Jedi. When you hit the end of the game you'd then be a level eight soldier (or whatever) and a level twelve Jedi. But if you simply refused to take the level up until you became a Jedi, then you'd be able to end the game as a level two soldier, level eighteen Jedi. Sure, it made those first couple of hours really challenging as you fought level eight guys with your level two character, but the payoff was that you'd be far more powerful at the end of the game. For a lot of RPG players, this is the heart of the game. The challenge doesn't come from individual battles, but from "winning" against the system itself by finding the perfect combination of classes or powers. The advantage of a system like this is that it lets the number-crunching, min-maxing power gamers pit themselves against the system. The disadvantage is that more action-oriented gamers get bored with all this spreadsheet crap, and if they don't do it right they can end up permanently gimping their character.
In the past, games with lots of dialog trees and branching plot paths were married to the number-crunch leveling systems like the one in KOTOR. It seems like BioWare is challenging that notion. What they're offering is the action-based combat system with the KOTOR / Dragon Age style storytelling. Even though I'm a fan of number-crunching leveling up, I really hope that this idea catches on.
The flow of most action games goes: Fight, cutscene, fight, cutscene, fight, cutscene, boss fight, end credits. I think this misses out on one of the most important features of videogames: The ability to deliver dynamic, unique experiences. If the player is just unlocking little movies by shooting dudes, then we're just making a movie that's a pain in the ass to watch.
In a game with a well-designed dialog tree, you can question a character in detail about the enemy, their history, what their goals are, the nature of the conflict, and what breakfast cereal is their favorite. Go crazy and gorge yourself on minutiae. Or you can just say, "Screw this. Just tell me who to shoot." It serves the same purpose as a cutscene (explain what's going on) but it lets the player adjust the experience based on how much they give a crap. It's far better than an info dump, or (shudder) quicktime event-laced conversations as with Resident Evil 4. Most importantly, it offers an experience that movies can't.
Having the game and dialog change based on player decisions is a good idea. But action titles don't do it because "that's an RPG thing". Mass Effect 2 is clearly courting the Gears of War / Halo crowd, and I'll be very interested to see how it's received by those gamers. It's my hope (and I know just how naive I'm being here) that this dynamic storytelling breaks free of its RPG roots and escapes into other genres.