The other day I probably said something people probably didnt expect from me. I said I dont expect 100% PVP Based MMOs to do well. However, I was thinking about Pure Arena Style MMOs. Sure, one can say they have a lot of fun in Guild Wars however, PVE is a LARGE part of that title as well. When Guild Wars launched this was a must for pvpers to do in order to acquire new skills. A few months after launch (after it was already a success), they became a bit more pvp centric. In a patch, Arena.net ADDED the ability to unlock all skills and weapons via PVP. Note, this was way after GW: Prophecies was a HIT. But prior to this expansion, you had to PVE in order to unlock skills and weapons. See what I'm getting at? Guild Wars does not support any argument whether a pure Arena PVP based title is viable. It has a LOT of PVE that is very fun to do I might add.
Next up we must consider Fury, Exteel, Gunz, Rakion, and other Arena style MMOs. I've played pretty much all of them and they are all fun in their own way. But their problem is they must compete against Call of Duty 4, BF2142, Team Fortress 2, etc. These are all free to play titles that are incredibly popular amongst pvpers. If you are planning an Arena Style MMO then sure you can do well but realize you will have to compete against all those monsters (Team Fortress 2, CoD4, Rainbow 6: Vegas, etc). So you need offer new features that cant be found in the big heavy hitters and/or take them out via brute strength (license a popular IP or present awesome gameplay). We must also must note that the big guys also include Character Progression. So no, having a 'leveling' scheme in an Arena Style MMO doesnt carry much weight.
In an interview with Auran's Fury Developer Adam Carpenter commented Fury was unique (for PVP based titles) because it presented persistent stats (character progression). No, that is not true at all. Most any major FPS nowadays offer that as well and is by far more superior for the purposes of PVP then most any MMORPG. In BF2142 players progress linearly for the most part. You earn XP and invest that into skills you want to unlock. Characters never vertically grow per se but they become much more diverse. In this fashion you can grow your avatar linearly and even unlock multiple roles (Classes) on one avatar. Very freeform and fun. I've read so many ideas on this board requesting this sort of character advancement.... Well rest assure it's already been implemented.
Now let's consider EVE Online. Does it have to compete with FPS titles? No, it doesn't. There is nothing like it in the FPS genre. For one, there is not any Space Fleet pvp based titles (unique setting). Next, they present persistant warfare in EVE Online- which does not exist in FPS space. Players can own terriority and directly make an impact in the universe directly. The scifi setting (as I already covered) is pretty rare in itself. Also, you can have HUGE fleet battles in EVE Online and can actually zoom all the way out, turning every ship into an Icon representation which makes them runnable on even pretty crappy computers (at least in theory). Also, EVE Online has PVE anyway which allows newbies to learn the mechanics fairly safely until they're ready for PVP.
So this leads to another problem we see in a lot of Arena Style PVP based MMOs. Some have asymetrical PVP (lower levels fighting higher levels). In Rakion lowbies get wiped by higher levels (or was it the RMT that got me). Gunz was smart enough to split players apart. Vertical progression schemes should be an absolute no-no for an Arena Style PVP title in my book. All progression should be linear like we see in Battlefield, Rainbow 6, Guild Wars, etc. If its non-linear (vertical), then you will need either a PVE component or a way to split newbies and vets apart (like Gunz Online, Savage 2). If it's no progression then of course its not a big issue. Most players really dont have a whole ton of skill even though we all think we do. So a newbie can usually figure out the mechanics kind of fast and get some kills in a no-progression title. But even that depends on the ramp up of the title. For FPS its okay to toss them all in the pot cause that's familiar but in a complex game with new mechanics you might want to invesigate other solutions.
Really though I have no idea why would an Arena PVP Based game feature vertical progression or even try to rely on splitting apart veterans and newbies. The only way splitting apart vets and newbies will work is ONLY IF you have a big populace like Halo 3. See, a game like Halo 3 can split apart gamers they always have a steady influx of newbies. But for a game entertaining a small pop like Fury its suicide to rely on being able to split apart gamers based on their 'experience level'. No, just no. You cant depend on players being on at all times. This is why Guild Wars worked- it was all linear. So if I logged on at 3am in the morning I have plenty of teams to fight. Whether you are a newbie or a pro, you will have fun.