Yay. We used to have a "Rules lawyer" way back in 2e. He was not a popular member of the group. I much prefer the DM being the ultimate arbiter and letting the DM weave the story, not the rules books.
Me too. I think that's the only fair way to do it, otherwise gaming groups end up having hour long discussions about rules, and trying to find loopholes. I've seen it happen before, and it's not much fun for the others, as it brings the campaign to a screeching halt.
As far as customizability, you may want to look into Champions. While this is traditionally a modern day 'Superhero' style game, I had a DM once that actually successfully ran a 'Dungeons and Dragons' campaign. He had set limitations on stats and abilities based on some custom character models, but other than that you could make whatever you wanted. It was actually quite interesting. I only sat in on like three sessions, but there was a whole group that played for a while. They all LOVED it.
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