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In many MMOs players character progression is artificially capped, e.g. by level 60 or 90 or 100 or whatever. Why do MMOs have these level caps in the first place? Why not just allow characters to continue to arbitrary levels with a mathematically designed leveling system that keeps the leveling experience interesting and endless?
Answers to this question may help us to see the reason behind the feature and decide if and how this should be implemented in our MMOs.
This is not a problem specifically related to MMOs; single-player games often have level caps as well, and the fundamental reason for introducing them is the same.
It's much easier and more practical to balance for a fixed range of progression than an infinite one.
You postulate that one could just implement a "mathematically designed leveling system that keeps the leveling experience interesting and endless" but this is much harder to do than it is to say (assuming you still want "fun"). Essentially all this is doing is finding power curve that isn't too shallow or too steep and using that curve to scale a player's statistics.
This is not likely to remain interesting for a long time. It lacks variety. It's just numbers getting increasingly bigger, and while that may entertain a few people for a little while you will eventually reach the point where the numbers are too big to be effectively comprehensible (42,132,927,189,100 strength) and don't have an appreciable impact (you might deal 92,101,626,001,292 damage per second at level 67,192 but enemies your level have a similarly inflated HP score, so it still takes you the same amount of time to actually kill them as a level 67 player).
Players are usually engaged by progression that introduces variety and choice (for example in the array of abilities they can chose from). A secondary effect in the introduction of choice is the ability to plan, to elect abilities or skills or gear that synergizes with itself in a particular way. While many games end up with some of those synergies organically, at least a good portion of them are initially planned for; it's much harder to ensure that sort of opportunity for fun exists in a system where abilities are randomly-generated and made available.
A system with procedurally-generated progression breakpoints is totally possible. It's hard to tune into something fun, though, because the more procedural variety you introduce the less designer control for fine-tuning you have. This means the designer is often forced to balance against the potential components of an ability set, not the abilities themselves. For a concrete example of such a thing in a small (non-infinite scale), consider the original Guild Wars and its expansion chapters. Each chapter introduced a large new set of skills, and player progression was mainly measured in skills and not level (which was capped at 20). Balancing for that combinatorial explosion was extremely difficult and allowed several undesirable, unbalanced (both over and under powered) combinations at times. That's why Guild Wars 2 chose to go with a much more directed and focused system.
A fully-procedural progression breakpoint system would be interesting, but nobody's tried/done it well yet -- and besides, assuming a perfect implementation of such a thing, you wouldn't necessarily need levels at all at that point.
There is a related discussion, and that is about capping lower than you eventually expect to allow (for example, how Diablo 3 initially capped you at 60, and GW2 at 80). This allows you to still design for a fixed range of progression but also expand that range somewhat -- offering new rewards and other such carrots -- to players who purchase expansions at a later day. WoW also does this, of course, but like the above it is not strictly anything to do with MMOs.
It's easier to think about what would happen in absence of a level cap in a generic mmo:
First Reason:
Players could become spread across the infinite level range, meaning less interaction between players.
Here's a quote from a study which analyzed a 1,356-million-packet trace of ShenZhou Online, a mid-sized commercial MMORPG:
Our major findings are as follows...Players who have a higher degree of social interaction tend to participate much longer. This suggests that game companies could increase the “sticki- ness” of games by encouraging, or even forcing, team playing. Furthermore, the duration of group play correlates with a group’s size and the network distance between players.
Second Reason:
The second reason is that having vastly overpowered opponents/griefers (also known as killers in Bartle's taxonomy of player types) can lead to frustration, dissatisfaction and abandonment of the game. In the case of PVP MMOS this could happen as newer players are repeatedly and unavoidably killed by high level characters. In PVE MMOS this could happen as high level characters kill-steal lower level characters.
Third Reason:
Players can become tired of randomly generated content. I believe one reason for this is because it's hard to programmatically create differences in kind (extra credits video on youtube) or a longterm storyline/narrative to keep the player interested.
All the other answers are very good but seem to miss one important aspect to level cap.
Reaching the level cap means the start of the end-game.
For example, in World of Warcraft, reaching the level cap meant you would be able to join all the other players with the end-game content like 20/40 player Raids, world boss events, etc.
The 'real' game in these type of MMOs only begins at the level cap, so players can compete equally, and after that only gear/weapons are important, and no longer your base level stats.
i have played wold of warcraft, and other mmorpg's regularly, and the general consensus i usually get when i ask people why a level limit is necessary is:
High leveled people killing low level people is to frustrating/unfair for many people.
eventually nothing in the game could stand up to your avatar's high level. this creates no challenge, and can turn into a mundane experience. However this could be counteracted by creating enemies so powerful you'd never beat them without help/CO-OP, or insane level grinding.
a finite level gives players a sense of accomplishment when they reach that level. it also allows them to go thru the fable'd end game content without worrying about assigning skill points, or racking EXP. (sounds weird i know, but it's what people say.)
some people i've talked to( Around 40 or 50) want level cap's to be abolished so there can have something to do. these people are in the minority as most people like the level cap's.
Game developers want level cap's to control the flow of a game's progression, (both in long term and short term), and to match players together more easily fo CO-OP play.
That's most of what i've heard,and experienced worth mentioning. hope it helps.
on a side note: im a hardcore gamer and would be very happy if level cap's went extinct. "Hint-Hint"
