Well Johnor, the only choices I really see for Hardcore Arena is a type of practice mode (or alternate rules to foster HC arena), no HC Arena at all.
Like I said originally, if the only outcome of losing a Hardcore Arena match is permanent character death, there's going to be virtually no high level HC arena. If that happens people will just make softcore characters to do their arenaing with which is basically a hardcore practice mode anyways isn't it?
Unless they have incredibly big incentives to do high level non practice HC arenas, but then you get into the problem of having significant rewards that are unavailable or unattainable to the majority of your audience (Which some people are okay with but which doesn't really line up with Blizzard's Philosophies)
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