Water can always be used as a visual addition. Low gravity water should be avoided, Purplejazz summed that up nicely.
Water as gameplay has a direct link to the goal of the level. To use water as a playable area, you should ask yourself why you want water in your level.
You can aim for a lot of combat in water for example. This is generally a big size pool with ammo inside it. The combat is generally a lot slower and slower paced and can only work well if the level doesn't take itself too seriously. It can be fun as a JDC event type of level, because the chaos can be hilarious.
As for a competitive level (1v1, 2v2, 3v3), I think it's better to only use small portions of water as a route. The movement drawback of swimming is too big of an annoyance to actually fight seriously in. Water can be used as route for rushing CTF scores or getting to a specific area with rewards (carrot, powerups). The water in this case is meant to make the player vulnerable, but not to take combat in.
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