In a previous entry I wrote about the death of a character and how it needed to be integrated into the game. This entry will focus on the loss of something important to the PC such as abilities, items or allies. It's sometimes easier for a player to give up the life of his character than to surrender his favorite weapon or tome of knowledge. This is a situation where the item defines the character instead of the other way around.
In every good movie or novel the hero suffers losses. It's critical to the hero's journey.
Here is an example from my own vault of gaming past:
Rob was GMing a 3rd edition GURPS fantasy campaign in City-State. My mage character assassinated a baron who rebelled against City-State. When I tried to escape, the Lars, the ancestral spirits of this noble house captured me. The easy outcome would have been with the Lars killing me, but Rob came up with something very cool. The Lars reached into my body and tore out my magery and left me without the ability to cast spells. Rob took much pleasure in my surprise. It was pretty cool.
So now I had a mage character with no ability to cast spells. I could have committed suicide by town guard, called Rob horrible names, or stormed out of the game never to return, but I am a sucker for such turns in my character's development. I bought some minimal skills in basic combat to help me survive then started my quest to recover my magery. During my quest I discovered different types of magic, including a more powerful source of magic. My character learned how to use this new magic and eventually recovered his old magic abilities as well.
When my character returned to City-State he had a respectable skill in combat, his old magic back and a new more powerful source of magic at his disposal. Because of this critical loss my character discovered other sources of strength and power. When I returned to City-State he shook the foundations of a very powerful guild and the city itself. This was all secondary compared to the fun I had on my journey to get to this point. The journey was the most important.
It worked because I had an excellent DM and Rob trusted me not to take my loss of magery as a personal attack. It made me go outside my characters strengths and discover his magery did not define him. It was just a part of him.
GMs should challenge their players and in doing so the players will suffer losses. It will test the trust between player and GM, but if the players accept the losses it will make the victories sweeter and more memorable. It allows the GM to be more dramatic and more playful with the character's story arc.