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This article contains information that is no longer relevant to gameplay, but is kept here for informational purposes.
Challenge Mode, a.k.a. Nephalem Trials, is a cut game mode from Diablo III.
The idea for Challenge Mode formed before the game's release. The original idea, dubbed "Challenge Mode 1.0," was to deliver more content using existing assets. Events such as Caravan Defense and Double Trouble were designed for this mode. Feedback from within the team was generally positive, but also apathetic—the events didn't feel special. Thus, the mode was redesigned, into "Challenge Mode 2.0," by which point, Diablo III had already shipped, and Blizzard was taking player feedback into account. This time, the idea was to create unique gameplay. Goblin Defense was created during this time. Internal team feedback was again positive, but claimed that these events ignored the point of the game (e.g. the lack of ability use or loot), and weren't fun when playing singleplayer.
What followed, dubbed "Challenge Mode 3.0," was a doubling down of the 2.0 concepts, namely the idea of multiplayer-focused PvE challenges as competitive mini-games, with a focus on skill-based gameplay (e.g. target acquisition and evading attacks/hazards). Soul Reavers and Barrel Breaker are events implemented from this period. This time, feedback was negative, as while the events were fun with friends, via matchmaking, it wasn't as enjoyable when playing with strangers. Winning felt random, and the classes were unbalanced for the types of events being produced.
It was at this point that the mode underwent a reset. It was also noted that the name had become a misnomer, as the original idea was to simply generate more content, but the name "Challenge Mode" indicated that a new way of playing the game would be present. The mode was renamed as "Nephalem Trials," with a focus on cooperative gameplay and leaderboards. Fleshpit Grove was implemented as an event in this phase of development. Reaction was positive, but the mode was cut, as there wasn't enough depth for a true competitive mode. The events were intergrated into Adventure Mode in the form of cursed events, while the idea of leaderboards was used for Greater Rifts.