Ultima Online (UO) was released in 1997, and it immediately demonstrated the high potential of the MMO medium. It was conceived as a full-on virtual world. You could buy a house and decorate it with knickknacks. You could ride a horse dressed in full plate and slay dragons. You could play a thief who hangs around the town bank in your underwear. You could buy a boat and be a fisherman. You could become a mad carpenter, building hundreds of tables and dropping them all over the town square like a maniac. You could also, of course, become a dreaded Player Killer, or PK for short.
The game was marred by serious technical issues, regular discoveries of dupe bugs, lag and utterly broken skill balance. The graphics were 2D - albeit charmingly crafted - which made it look somewhat passe during the advent of 3D games. If it were released in such a state today, it would never have sold more than a dozen copies. As it was so fresh, however, it still managed to build up some 100,000 subscribers in relatively short order that simply fought through the bugs and lag issues to find the innovative and exciting game underneath.
PvP combat was largely unregulated. You could call guards on your attackers in town, but once you left for the wilderness, there was nothing stopping anyone from caving in your skull and taking your pants. There wasn’t any experience loss and it was relatively easy to get resurrected, but every time you died, you dropped everything that you were carrying. Regardless of whether or not you as a player wanted a peaceful existence, someone else could decide to ruin your day - if they could catch you.
In response to a deluge of player complaints about rampant PKing, the developers attempted to introduce a sort of criminal justice system to keep it in check. Players who were responsible for multiple murders had their names turn red, were then unable to use towns, and incurred a 10% stat penalty every time they died. This didn’t have much of an effect, as PKs turned to spending large amounts of time in game unattended to have their murder counts decay off, or just travelled in larger groups to make it very unlikely that they would be killed.
Finally, in 2000, the developers released UO: Renaissance in 2000, which split the world into two mirrored facets - Trammel and Felucca. Felucca was old-school, but players couldn’t attack one another in Trammel. According to a recent blog post by Dan Rubenfield, after its release UO’s subscription numbers jumped from 110,000 to 220,000 - but the PKers and PvPers that had so loved to e-bolt the miners of Sosaria to ignominous death after death were terribly upset.