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The game has it is foundation in PvP, meaning both the rules around PvP as well as a purposeful, exiting PvP experience. Purposeful PvP inevitable has consequences on the whole game design and playing experience, and a big game always run the risk of scaring away its casual customers if that impact is too deep. Already by having full loot, we are steering Mortal online gold into a niche genre.
So, the game has full loot, meaning if you die someone can loot all your equipment. You are also to fight anyone anywhere. But there are also consequences, administered by the players themselves as well as a flagging system. The flagging system keeps track of your actions and sets your flag accordingly. If you for instance steal from or kill someone that is innocent you will be flagged as a criminal or murderer. People can call the guards on you if you are in a guard zone; some NPC will not trade with you etc. For murderers additional penalties apply. The flagging system is deep and very hard to explain by words, but pretty easy to grasp when playing.
It is also worth mentioning that guilds at war will not be affected by the flagging system. It is very possible to fight out your battles in a city, attacking and killing members of the opposing guild will not lead to a murder flag. You are still flagged if you attack other people though.