For lack of a better name, the wider continent Dragon Age takes place on is called Thedas (THE Dragon Age Setting), with Ferelden being where players spend most of their time. Also, yes, I'm going to be talking about Dragon Age because everyone in the entire world is playing it or talking about it, no exceptions here. Give in. One of us. One of us. One of us.
In Ferelden--where the game is set--we have elves of the pointy-eared and wood-dwelling varieties, recognizable, but there are twists. The elves are playable, but are broken down into two separate, and very different, options, neither of which involve tights and singing jolly songs and both of which lead to some depressing scenarios when you have to interact with the wider world, especially the humans that treat you like a second-class citizen if they're in a good mood.
One choice is the city elf, which means your people were once enslaved by the humans, but now scrape out a living and try to get by in the ghettoes of human cities and even if you're not technically a slave, you're still a second-class citizen. Most human NPCs treat you with contempt--all but calling you "boy"--and expect you to fetch and carry just because you're an elf, even if you're an elf wearing ancient, powerful armor and carrying a sword that is on fire all of the time.
The other choice is a nomadic Dalish elf, who try to uphold their old traditions and The Old Ways, but this means they live in wagons, roam the forests, and try to stay ahead of angry villagers and everyone else who doesn't like them. Playing a Dalish character means not only do most human NPCs come perilously close to calling you "boy," the non-Dalish NPCs treat you the way they'd treat the bizarre cousin that lives in a van down by the river.
As a result, you have a recognizably "elf" character, with a number of different playable options. Do you play as the racist elf refusing to do anything for humans? Do you sort of benightedly tolerate the abuse? Or do you put anyone who sasses you in their place, even if it may mean missing a particularly rewarding quest? All options, all compelling, and all of them are playable all the way through the game, including the "Racist elf" option.
#2 The Burning Wheel
While elves in The Burning Wheel do resemble the classic Tolkien elves so loved and loathed by players worldwide, there are a couple of interesting mechanics at work in the game itself that would be lovely in any online game.
The first is the concept of the Lifepath--used in the tabletop game Traveller, as well--where instead of selecting certain aspects of the character, they are shaped through events in their lives. As your character moves through his life, your choices along the way give you skills, traits, resources, stat modifiers, etc.. Whether min/maxing MMO players would tolerate this level of randomness and lack of control over their characters is left to the imagination, of course, but some level of interaction in character creation would be nice beyond trying to figure out what all the numbers mean and worrying about whether these decisions may break the game somewhere down the line. Imagine being vaguely crippled because of bad decision-making in your character setup process, meaning you have to work around whatever flaws you wound up with, rather than picking "Two handed fighting" instead of "Shield use".
Granted, there would instantly be min-maxing guides on all the major fansites, but it would make for a more compelling, if time consuming, character creation experience, especially if the non-optimal path was still playable and fun.
However, the defining attribute for elven characters is a Grief stat. Elves here, as in other games, are largely immortal, but the burdens of immortality are seldom considered when most players don't bother reading the lore anyway. But there is an emotional cost to consider when you're an immortal being watching everything you love inevitably wither, change, and die. In The Burning Wheel, Grief functions similarly to Sanity in the Call of Cthulhu games. Elves can only stand so much suffering, torment, and despair, and once it gets to a certain point, they can emo themselves out of existence.
Imagine playing a relatively powerful character, but every death brings you closer and closer to the brink of collapse, because you just can't stand to see even more suffering. Again, there's the question of whether players would tolerate something so far off the norm, but there's also the option of controlling the amount of powerful characters in the world. Do you take a chance that your elf friend might emo out in the middle of the raid when he provides a considerable amount of damage?
Some elves are magical quasi-humans that live in trees and wear fancy tights. Elves in ElfQuest are the descendents of humanoid aliens with powerful psychic powers and near immortality. Also, they could shapeshift and alter their metabolism to survive wherever they happened to live. And their spaceships traveled by telekinesis. They finally landed on a planet called Abode, where they ran into humans, who had artwork depicting elves, so the aliens decided to look like elves so the humans wouldn't freak out too much. Due to some drama involving trolls, the now "elves" were forced to scatter when their spaceship crashed, and their powers were pretty weakened in the crash. And they'd traveled backwards through time, so they were attacked by cavemen.
So, 10,000 years later, the story of Elfquest begins with elves, trolls, and humans now stuck living together on this planet like wacky neighbors in a sitcom. The elves wind up forming vaguely Native American tribes in that time, so the "present" feels very far removed from their psychic spacefaring past.
I didn't make any of that up, by the way.
While some of that reads like demented fantasy, within the context of the world, it all works, providing a coherent (if a bit off-the-wall) reason why all these races exist beyond "Well, long ago everyone got along, but then a bunch of very bad things happened." Plus elves that have to do a bit of struggling are far more appealing than elves that exist as fantasy world rock stars, hanging around, being pretty, and living forever, like vampires, but with fewer boring teenage girls chasing them.