The Dread System is the developers attempting to convey moods and ambiance in game. LOTRO has Tolkien's lore and back story behind it and it is obvious that the ability to provide anything close to the level of immersion one could experience in a Tolkien novel in LOTRO would be an incredible benefit.

The mechanics that the LOTRO developers are using to convey this emotion and mood are music, sounds, the user interface, and the world itself (I am guessing including lighting, model textures, design, etc.) Does it sound like anything new and revolutionary? Not yet, we are talking game immersion here and all of the newer MMORPGs are using things like to to create an immersive environment.

Characters in LOTRO actually experience "moods" relative where they are (and it appears what they are as well; level, class, etc.) and that "mood" is reflected in the individual characters stats. Here are some examples of how a character's mood can be effected by he Dread System according to the official release:

Characters experiencing hope find that:

• Their morale stat is increased
• They are more receptive to skills that increase their morale
• They take less damage from attacks
• Are more likely to hit their target with their attacks

Characters experiencing dread find that:

• Their morale stat is reduced
• They are less receptive to morale-increasing skills
• They take more damage from attacks
• Are more likely to miss with their own attacks
• May occasionally be seized with fear and be unable to attack at all.

According to the official release moods come in three varieties or types of moments: moments influenced by people, moments influenced by locations, and moments influenced by situations. They go on to say that you could categorize the moments in the actual Tolkien novels into these three categories. Here are some examples from the official release.

Active Mood

People

Hopeful: Galadriel, Gandalf, Elrond, Tom Bombadil

Dreadful: The Witch-king, the Balrog, Frodo (when he's bearing the Ring, that is.)

Situations

Hopeful: The Ride of the Rohirrim, the Eagles' arrival at the Black Gate

Dreadful: The Siege of Minas Tirith, Helm's Deep (before Gandalf's arrival)

Passive Mood

Locations

Hopeful: Rivendell, the Shire, Lothlórien

Dreadful: Shelob's Cave, Mordor

Passive moods are for example when you enter a hopeful region such as Rivendell you characters mood will instantly improve due to the overall hope of the region. Conversely if you entered a dreadful region then your characters mood would instantly decrease.

The active mood example given is that you enter an area of a character such as Gandalf that inspires hope. It appears that the different types of moods can stack but mood effects from the same type do not. The example states that if you came into the area of Gandalf and Legolas in Rivendell you would already get the stat boost from the passive mood of Rivendell but you would only experience an additional boost in hope from Gandalf as he is more inspiring than Legolas.

There isn't an in depth explanation of situational moods given but the limited examples seem to indicate that this mood is relative to location:  Dungeons, bosses, etc.

There are items, skills and temporary perks that you can use to boost your characters mood as well and player generated sources of hope stack with active and passive hope sources.

The overall idea of the Dread System isn't completely new but  it does seem to be more in depth than most if not every attempt before it. I recall things like a Dark Elf's stats increasing at night in Lineage 2 and several other similar stat changes designed to create immersion or mood. Kudos to the LOTRO devs for the Dread System and it looks like it is a great aspect of the game.