Health in video games is a way of gauging how close the player is to losing a fight; when it reaches zero, the player loses and has to start again. How a game handles health is an expression of how the game designers want a player to react when they start to lose a fight. Consider the following examples
- Doom. In essence, the player has 100 health to start with, and can only increase it by picking up medikits of varying sizes, which restore a predetermined number of health points up to the original maximum of 100. The intent is for the player to play the game in a fundamentally different way once they find themselves on low health. They will have to tread carefully and search for the next available medikit before returning to the more hectic action the game thrives on.
- Halo. The player has an almost inconsequential health bar, plus a set of shields. When the shields are low, the player can hide away from combat for a few seconds, after which the shields will quickly recharge. The intent is for the player to find somewhere to take a rest for a few moments before continuing to play in the same way they were before.
- Diablo gives the player several options. It can be played a little like Doom, being conservative until the next healing item is found. Alternatively, if you have healing powers, mana can be turned into health, with the mana itself recharging in a very slow version of the Halo method. Thirdly, money can be turned into health via potions, so the player has to decide between permanent items (weapons, armour, etc) later and potential death or temporary items now and continued play.
Shields which recharge up to full once you hide behind cover for a short period (from here on 'hide-and-recharge') is a good mechanism both for moment to moment combat, but also for level designers. In the heat of battle it means that no matter how much of a pounding you've taken, you can always duck behind a rock briefly and return to the fight at full effectiveness. From a level design perspective, each enemy encounter can be tuned and balanced in the knowledge that players will arrive there on full health. The designers don't have to make sure there is a convenient health pickup before a large fight just in case the player ate one of his own grenades killing some minions earlier on. Halo may not have been the first game to do it, but it was certainly the landmark title for hide-and-recharge, and it has spread from there into almost all shooters, action games, and basically anything else with set piece enemy encounters.
The odd thing about this near universal adoption of the hide-and-recharge system is that the designers are all agreeing on the same design goal when it comes to health. I don't know whether what they want a player to do when overwhelmed in combat is to retreat and try again regardless of genre, or whether during the design process they just say "hide-and-recharge works well enough, we're focusing on innovating elsewhere". Whatever the case it would be nice to see some more people mess around with how health, and its best friend death, are used to reflect the atmosphere of a game. Especially when you consider games like Uncharted (an Indiana Jones-esque action comedy romp) and Modern Warfare (a much more realistic* modern military shooter) both use the same health system, yet couldn't be much more different in tone.
*more realistic than Uncharted, not realistic on an absolute scale.