The conversation about perma death first came up when Iwata asked the three to share the defining characteristics that make a game Fire Emblem. Maeda brought up the perma death feature as something that gives the FE series its uniqueness. Maeda feels that this feature makes players feel more emotionally attached to the characters, and also heightens the tension during play. He also admitted to Iwata that when he played Fire Emblem as a fan he'd often resort to resetting the game to make sure he didn't lose a character.
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As development progressed, the staff had constant meetings with Nintendo. One issue that arose during these meetings was how to open up the game for beginner players. The major point of debate for this area was the perma death feature. Nintendo's side first suggested that they make it so that fallen allies will return for the next map. Higuchi, who was serving as point man in the conversations with Nintendo, originally felt that doing this would make the game cease to be Fire Emblem. He felt, like Maeda, that the perma death feature contributes greatly to the feeling of tension the players have during the game, and is one of the major appeals of the series.
The staff spent a great amount of time debating this issue with Nintendo, with the dialogues becoming heated. Narihiro recalled the debates taking place daily, and sometimes lasting late into the night.
Narihiro was actually familiar with this debate, though, as it happened with the Shadow Dragon remake, and even Fire Emblem games prior to that. They even implemented a revival system for past titles but removed it before release.
Higuchi recalled one instance of perma death being debated for the series. When he first entered the company some 14 years back, Nintendo was working on the design phase for 1996's Super Famicom Fire Emblem: Seisen no Keifu. The design document that he first saw for the game had "You can die up to five times" written in it, something that he protested to the game's director.
For New Mystery of the Emblem, Higuchi felt that this was a point that could not be negotiated. However, after talks with Nintendo, they came to the conclusion that beginner players may be put off after just hearing that your allies will not return to life after being killed. Maeda noted that beginner players wouldn't know about the trick where you can reset if you want to get the character back.
To make the game enjoyable for beginner players, they originally tried to make it so that one of the modes of difficulty would make allies return for the next fight. However, under the thinking that advanced players would want to play the harder difficulties but still have their allies return, they untied the feature from the difficulty settings. Regardless of difficulty setting, you can play the game with perma death on by selecting "Classic Mode, " or switch perma death off by selecting "Casual Mode."