Muramasa Sengo was a legendary swordsmith, alive during the Sengoku period of Japanese history. Chances are that if you have played video games for long enough, you have come across his name. He and/or his swords have made appearances in numerous video game titles, including mainstays such as Ninja Gaiden, Final Fantasy, and Castlevania.
Unfortunately, most of these titles have evoked the Muramasa name lightly. Sure, Muramasa was a master swordsmith, and games typically recognize him for this, just as Final Fantasy III rewards the Muramasa blade as the ultimate weapon for the ninja class, but that's only half of the legend.
Most geniuses are notorious for their eccentricities, and Muramasa Sengo was notorious for being a violent, delirious, and altogether unpleasant man. This perception, combined with a series of misfortunes involving the Tokugawa clan, contributes to the more sinister side of the legend.
It is said many members of this family were killed by Muramasa blades, either in battle or in ritual suicide. The last straw came when shogun Tokugawa Ieyasu accidentally wounded himself with one. He banned any sword made by the Muramasa school.
Consequently, many superstitions regarding his blades were formed. Facts and rumors were distilled through literature and performing arts into the legend as it stands today. Astro Boy creator Osamu Tezuka's short film Muramasa (1987) illustrates the legend well.
In it, a samurai discovers a cursed blade, which has great power, but he is unable to control the power, leading to much needless bloodshed and, eventually, his suicide at the hand of the blade. The story exemplifies a precedent on exchanging vitality for strength. But this concept is not exclusive to Japanese folklore. It can be found in many places -- such as in video games.
It's a longstanding tradition for players to be asked to intentionally harm their on-screen representation in order to win. A recent and relevant example of such virtual mortification is found in Vanillaware's Muramasa: The Demon Blade, which tidily ties together Japanese myth and video game tradition. The game allows the player to equip their avatar with three Muramasas, but each sword will break if too many special attacks are performed.
Muramasa: The Demon Blade
And battles are tough, requiring special attacks to be used frequently. Breaking all three swords is a real possibility, and, without an adequate way to attack and defend, defeat is too. In effect, the game tells the player to kill a bunch of enemies, but be careful how you do it, or you'll kill yourself in the process.
At heart, this resembles the legend of Muramasa blades: how they grant their wielders great power, but can require of them their life in return. But what advantage does this principle offer players? Surely such malice is an ill-seeded trope dreamt up by draconic game designers solely to annoy unsuspecting gamers. Or could this bad medicine be a case of tough love, ultimately leading to a more diverse and interesting experience? The answer is... well, it depends.
A lot of games that employ a suicide button just don't have the player's best interest in mind. They tend to serve some ulterior motive other than enriching the experience.
The traditional knock-everything-down special attacks found in most brawlers, such as Haggar's spinning lariat in Final Fight, will hopefully rot in their arcade graveyard. These moves knock back the throngs of thugs that will surround you, but deduct a fixed amount of health each time. Given the pay-to-play nature of arcade games, this makes the game designers out as the real criminals, enforcing rules that serve only one practical purpose: to make you poorer.
Likewise, the turbo/fatigue dynamic in sports games is an unnecessary relic. Its intent is to make the experience more realistic, but not always more enjoyable. These types of Muramasa devices seem to overlay the structure of the design, rather than being an integral, organic cog of it. They have little relevance.
Another type of Muramasa is the "Participation Is Optional" kind. These allow the player to opt in to benefits, but face penalties for doing so. They somewhat improve the game for experienced players by allowing them to choose a high risk/high reward strategy. For instance, the Masamune is one of the strongest swords in Symphony of the Night, but equipping it greatly reduces defensive statistics.
Similarly, the Thornlet/Bone Mail/Cursed Ring combination is your strongest defensive option in Final Fantasy V, but your health will gradually deplete, you won't be able to resurrect yourself if you die, and you'll only have 60 seconds to win a battle before instantly dying.
Then there are self-destruct commands like Recarmdra in Shin Megami Tensei: Nocturne, where a player can sacrifice a party member in exchange for restoring the rest of the party's health and magic points. These types of suicide mechanics have some relevance to the design and can increase the value of a game for those who care to use them, but you can take them or leave them (literally).
These examples utilize Muramasa concepts to an extent, but to really understand the advantages of self-injury, it's best to look at systems in which these practices are fully integrated. The types of systems found in games like Muramasa: The Demon Blade require players to pay at the door.
There's no way around it. Either vitality is to be sacrificed for attack power, or vice versa. This at first may seem like a detriment, but can, in fact, improve the gaming experience by offering multiple ways any given scenario can play out, instead of the same, de facto situation every time.