Would this be possible? I'm assuming that if you die, you fail (in more ways than one), but is that the only way to fail quests? I read about there being timed events as well as survival ones where the player has to combat oncoming waves. Also, I was watching a beta stream where the player finally found Cain down in the Cathedral and suddenly 4 skeletons started slashing Cain with their swords. I'd like to see a player just sit back and watch to see if anything would happen. If not.. care to explain how a withering old man is able to take several sword slashes to the back?
In beta? Short answer: No.
I am interested in reading more about the endless, waves, and timed dungeons, but there is only one endless "wave" sequence in the beta that you cannot fail.
After the cut-scene I ran backwards to see if there was a hidden chest or anything. I was wondering this as well and it appears Cain would not die. A lot of the quest NPCs that follow you have boxes at the top left, some with no health bars (i.e. cannot die).
The few times I have died so far, you just get sent back to the beginning of the area you are in. So if you are in a dungeon, just a short distance back from the last entrance.
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