|It's not as much fun when it's all you eat.|
This was a position my group and I were facing a few years ago. Three different campaigns all crashed in the face of a Total Party Kill. We tried D&D (Midnight), Traveler, and Vampire. All ended ingloriously. It was frustrating, and annoying. The story was over, and while a TPK was better than the game just fading out on its own, we were still unsatisfied. The Game Master in each game could have just hand-waved the death scenes, allowed the players to win and continue. That, or have a super-powered NPC just happen to be nearby and save the PCs because he's got nothing better to do. But either scenario robs the game of the risk that makes it feel alive.
Around this time, I had read about a concept in gaming, Fate Worse Than Death. I honestly don't even remember the blog I first read it on--I've tried to track it down, but to no avail. I know it has nothing to do with the game by Vajra. Perhaps it was sparked by diceofdoom. In any case, it manages to do two things--keep the game going, and still maintain the consequences and risk that makes death and failure so impactful in a game.
In essence, A Fate Worse Than Death operates on the maxim that "the characters survive, but whatever could go wrong, does." The PC's survive, but are in a coma, or torpored, or captured and forced into brutal slavery by their foes. Time passes--a good amount. During this time, everything turns sour.
Family and allies are killed or imprisoned. Homes and bases are destroyed. Their awesome spaceship is stolen and taken by rivals, or melted into scrap. Magical libraries are sold off or burned as kindling. Treasure and magic are lost forever, or seized by the Empire. Everything and everyone they care about are forced from them and ruined. And their enemies stand triumphant--the evil vizier has married the princess and been crowned Sultan. Their uncle sits on the stolen throne, and the Empire moves forward, and none remain who dare to oppose them.
The players, when the finally wake up, or escape, or somehow escape their predicament, look at the ashes of their ruined lives and envy the dead. Their's is truly a fate worse than death.
And so the game begins again, with all the odds stacked against them, starting with less equipment than even the humblest beginner. Everything is against them, and everything has gone wrong. Can they fix their world? Or will they be as Sisyphus, forever doomed to struggle, to fail, and to struggle again and again? Either way, if you and the players aren't ready to see the game itself die, perhaps there's a second, more sinister option to consider.