Game balance is basically the idea that whenever an adventuring group has an encounter, they can be assured that they can win, even though they may suffer some losses.
I don’t believe in Game Balance. It is a ghost that everyone chases but none have captured on film. Even if it were possible to balance a role playing game, or it’s encounters/characters/etc., I do not believe it should be attempted. Here’s why.
When your brand new set of beginning characters, let’s say 1st level for easy recognition, set out into the wilderness or dungeon or urban sprawl, they should not expect in any way that the world that is before them is balanced for what they can handle. Instead, they should expect that if they open the wrong door, or venture into the wrong forest, or tread down the wrong alley in the wrong part of town, there may be something waiting for them that could quite literally destroy them without a thought.
If the group hears about a nearby mountain that reputedly houses a Dragon, and they still gear up and head out towards it, they will probably die. They should know this. The party should not expect that the Gamemaster will set them up with enough “balanced” encounters on the way to make sure they have the appropriate level and magical equipment on hand to survive.
Life doesn’t work that way. Neither should life in such a brutal environment as your “typical” fantasy sword-n-sorcery world. Taking that brutality out of the story makes for an uninteresting venture that really doesn’t have any verisimilitude. It won’t be believable, and it won’t be compelling.
However, remember that if you as the Gamemaster are going to set horrible throngs upon them while they camp for the night without justification, you are also breaking the world. Overwhelming the party does no good if it is beyond their control. The players should be provided with enough information to be at least partly prepared for wherever their travels take them.
Be realistic. If a couple of people leave their car while on safari and walk off into the desert only to get eaten by lions, they were stupid and deserved their fate. A group that knows that lions may be nearby, and stay in their cars and stay on the radio shouldn’t then be assaulted by a Blood Fiend who just happened to be stalking the lions. Unless they had some clue that a Blood Fiend was also in the area and they went there anyway for their very first adventure!
Dungeons always seem to be designed to make sure that the characters can survive long enough to get to the end of it. Well, except for one very famous dungeon that is specifically designed to kill them as soon as possible. Most dungeons are laid out in levels, with each level filled with the types of monsters that they can kill at their level, and enough magic items in the lairs to set them up to be able to defeat the monsters on the next level. Which they won’t find the stairs for until just after they reach the next experience level. The same design is pretty much copied for wilderness adventures or ruined castle explorations.
How can the players expect things to be like this and yet still enjoy the challenge of adventuring? If you knew that every day was going to be survived and that only benefits await you in your future, wouldn’t that get a bit boring? Admittedly, I’d LOVE to know such a thing in real life, but where’s the fun in that?
Unless there’s that one dungeon area or level, unless there’s that one mountain range that only the foolish or the very high level adventurers visit, unless there’s that one part of that city that everyone knows is filled with the most treacherous types, then the players will get bored.
When you the Gamemaster are designing your world, make sure that “here be dragons” on the edge of the map is a real warning, and not just something to fill the edges of the map. Let the villagers be overheard talking about how many adventuring groups have gone into that swamp never to return. Horrify them with the idea that they can die if they venture into the wilderness. Don’t kill them on purpose, just make sure they know that it can happen if they don’t plan and don’t prepare.