The thing about in-game failure is that you need to be able to figure out how to define it. Not all failures are created equal; most players will have stories of things going wrong where they wanted to throttle the GM, and stories of failures that they enjoyed every minute of.
So what constitutes a “good” or a “bad” failure?
A good failure, in general, is one that is irritating in-character, but overall improves the plot. Perhaps it pushes the story, or opens an opportunity that wasn’t there before. It might be a Pyrrhic victory, a technical win but an overall loss; or it might be a heroic loss, in which the characters technically lose, but their actions still pose a great inconvenience to those they were fighting. Or perhaps it’s something that, while technically a failure, allows the players a chance to engage in a kind of roleplaying they find satisfying. Either way, the end result is something that a majority of the group enjoys.
A neutral failure happens, and people move on. It might incorporate aspects of both and thus be balanced, not really fall into either category, or just be too minor for anyone to care about.
A bad failure is arbitrary and frustrating, both in and out of character. Sometimes, this is because of denial of agency; the characters may as well be sitting on the sidelines and the players reading a book, for all the effect they have on the world and the events around them. Maybe it’s plot-destroying, and even the GM is tempted to declare it not so. It might be completely anticlimactic (a legendary hero being triple-twentied by a mook, for instance). Either way, a majority is unhappy, and often they make their displeasure known, making it harder for anyone else to be satisfied.
Similarly, there are three categories of failure origin in the average game.
The first, and most intrinsic to many RPG systems, is failure by dice. This really can’t be attributed to anything but Lady Luck saying no. Maybe it’s rolling a one-digit number on a save, or botching that vital Investigation roll. Either way, it’s all in chance’s hands. Now, dice failure on its own tends not to be “bad” failure, since it is next to impossible to attribute to GM malice. However, in a noncombat situation, this can edge into bad failure by cutting off a chokepoint. For instance, there may be a vital clue that can only be reached through a very specific roll, and nobody can make that roll. If that’s the case, and dice failure occurs, there’s justification for people being angry; after all, if it’s that important to the storyline, why is it left up to chance and accessible only once?
The second is failure by player. As the name suggests, the root of this sort of failure is ostensibly within the players themselves. Sometimes it’s innocuous, like slightly misjudging the location of the dragon, or that the torch is on the left side of the hall. Other times it’s a bit less forgivable, like failure to make sure everyone who “knows the plan” actually understands what the plan is, or someone just not realizing that walking around with obvious weapons is an invitation to trouble, or misjudging the radius of a fireball. The stories you’re likeliest to hear about this kind, though, are out and out poor judgment and stupidity: Attempting to win the queen over with a demonstration of the character’s dazzling range of “Yo momma” jokes, or throwing an iron helmet down the hall of the prison they’re supposed to be escaping from quietly. Ordinarily, this one shouldn’t be grounds for complaint—after all, actions have consequences. But when the group just doesn’t realize how bad an idea that particular plan was, they’re less likely to listen to “What were you thinking?” and more likely to call shenanigans. Irritatingly enough, the kinds of people likeliest to make these mistakes are the least likely to admit that they are mistakes.
The last is failure by plot: This is what happens when, for the story to progress, someone has to be unable to fulfill one of their plans. Perhaps they need to lose a battle. Or can’t realize early that the traitor really is that charming politician they’ve been defending. This one is the likeliest to have both “good” and “bad” failure depending on how it’s played. On the one hand, these failures often enhance the plot, prevent the group from getting too cocky, open new opportunities or otherwise improve the game. On the other hand, here also lies railroading, the removal of agency, the ending satisfying to none but the GM, and other irritations. This one requires careful control.
(For added amusement, the failures can easily be mapped onto D&D alignments, with the player impacts on the moral axis and the categories on the ethical. So a “neutral” dice failure would come out as CN, and a generally disliked plot-failure, like a blatant railroad, would come out as LE. System-neutrality prevented me from making this a running theme.)
Got the terminology down? Good. We’ll get into how to make these things serve the plot rather than just serve as irritations starting tomorrow, type by type.