In about three years of continuous campaign, with about 12-24 hours of playtime per month, there's only been one character death (and that person (my sibling) was soon leaving the campaign to go to college anyways). We've been using 5e D&D hacked to hell and back, using Hack & Slash's A Table for Avoiding Death, weird-ass monsters and weird-ass monster stats, altered saving throws. I've fudged dice to prevent character death at least 3 times.
Admittedly, part of this was gentle on-the-spot rebalancing to address the fact that I had made custom monsters with custom stat blocks. In an attempt to speed up combat, everything I made did shit-tons of damage. (I think dragons could potentially do around 16d8 damage per round?) Not infrequently I made something do too much damage. Taking account for average damage only, instead of averages and ranges, has been an ongoing issue in my design practices.
I feel somehow dirtied by the whole saga. Character death is an integral part of the D&D experience. It's a shame that my players are missing out on it. Avoiding it may be preventing angst and antagonistic feelings at the table, but it artificially creates a ceiling for growth. It limits the range of emotion and possibility. The campaign is not the best that it can be without a more real possibility of unfortunate character death.
I don't want to make it sound like my players are incompetent. They're not. They can sense a death trap when I put one in front of them. And there have been the fair number of insta-death traps. But there are at least two in each group that have good senses of risk management. The problem isn't that the party does stupid things, it's that the baseline danger of adventuring that I've created is fairly mild, which is on me, not them. Death by bad dice is practically non-existent. Death by recklessness has been wisely avoided.
All of that said, I think I've compensated for it as good as one can hope. There are other, potentially more interesting, modes of fail-state than eternal character death. Such modes must be woven into the fabric of the campaign world, as it is entirely dependent upon the capabilities of the setting.
For my Tidelock homebrew campaign, the mode of character failure is this:
Failure -> Injury -> Expert Assistance -> Further Entanglement in Politics
1. Failure. Some failure must be produced during the course of adventure. A bad dice roll, an act of recklessness, a social-political miscarriage.
2. Injury. The Failure initiates the Injury, which is a state in which the player does not wish to or cannot carry on adventuring within. It is not impossible to adventure, merely undesirable. Examples include a lost arm/leg, semi-permanent blinding, a horrible curse, a character or the party was arrested and thrown into jail, and/or a Madness. Death is included here, if Resurrection is possible.
3. Expert Assistance. To get rid of this injury and resume adventuring, the party must seek out an Expert. This can be a plot hook all by itself. These Experts must be scarce. A cleric who can cast Heal, a surgeon who can remove that arrowhead in your ribs, the sage who can lead you on the path to sanity, a political connection that can bail you out of jail.
Each society in the campaign has their own Experts, who dole out their services under different circumstances. In Chronulus, Experts typically require extorting fees. In the Lunar Republic Experts require House connections. In Kobara services are rendered by fame or by waitlist. The Solar Empire only allows citizens to have access to its Experts.
4. Further Entanglement in Politics. All Experts are under the employ of, entrenched in, or wanted by, various States and institutions of power, and hence they are deeply connected with politics. They're hoarded like gold bricks or prize cattle. Nobody wants to let someone go who can Teleport, or Resurrect, or Soulsmith. If an Expert isn't under the control of a State they're hard to get to. Nobody likes rogue Experts giving out their services to just anyone. If they're not under control they are often hunted.
What this means is that access to an Expert's services is held back behind various types of gatekeepers. Spies, lawyers, bankers, chancellors, etc. And they never provide access for free. To pass through the gate you gotta pay a toll. An Adventuring Party being the capable people that they are, this toll usually takes the form of a favor. These favors have, in my experience, been a fantastic way to dangle plot hooks and entice the players to go out into the world and do things.
Let's take a recent example from one of my ongoing campaigns.
1. Failure - The Paladin, a princely scion of a dying house, convinces the party to accompany him to his homeland to confront his mad uncle-in-law, who has recently demonstrated aggressive tyranny and insanity to the point of warranting confrontation. Along the way they encounter some of his thugs, and a battle ensues.
2. Injury - One of the Fighters receives a mortal wound from this battle - a spear in the gut. They will die a slow, painful death without Expert assistance. The party knows this. They know that there will be no loyal Experts ahead of them. They decide to change course and head to the nearest metropolis: Chronulus, City of True Time, where there are many medical Experts.
3. Expert Assistance - When they get to Chronulus and locate a surgeon, he informs them that the waitlist for surgery is currently 6 months. Their friend will die long before then. Because Chronulus is an anarcho-capitalist haven/hell, the doctor informs them that they may skip the waitlist by paying 5000gp up front (after the 200gp diagnosis). The party has nowhere near this kind of money. Things have gotten more desperate as the gut wound becomes infected.
4. Further Entanglement in Politics - Left with no other choice, the party (the Paladin in particular) decides to take out a loan from the nearby bank. He knows that loans in Chronulus are always predatory, but nevertheless feels responsible for the situation, and so ensues. At the bank, a clerk informs the paladin that he has no credit history and hence his application is denied. The Manager of the bank, an astute agent and political comrade of the ruling Archmages, knows the history of the paladin. He knows that the paladin has had recent dealing in The Lunar Republic, and that he is a diplomat, and that he is now desperate.
The Manager intervenes, but not for free. He opens a line of credit with the Paladin. He gives him all of the money he needs to save the Fighter, but for this he gives him a job. The Paladin has agreed to act as a double agent on behalf of the Manager, and hence the Manager's political connections, in The Lunar Republic.
Hence, the party has become more entangled in geopolitics. They now owe something to powerful people. This is good for the campaign.
Frankly, I like this system. Until I can wean my players onto more danger this will suffice. It pushes the campaign into unexpected and interesting directions. It forces players to interact with the campaign world. It's about as decent of a substitute for eternal death that I can hope for.
But I'm not convinced it's the absolute best way to go about things. I'm interested in what people have to say about failstates and negative feedback systems in RPGs, and I'm sure plenty of people have talked about it somewhere. If you've got a useful link or ideas on the subject, please post it in the comments below - you'll have a Noob's thanks.