There was a very-near TPK in my current online game (Castles & Crusades) this weekend. There was a 25% survival rate--3 out of the 4 characters (all 2nd-level) are no more.
This was sort of a unique one, and I'm left wondering if perhaps I didn't broadcast something as clearly as I should have. But then, the players let themselves be tricked into thinking that this Evil NPC had a Dagger of Dragon Slaying, when all he had was a +1 dagger. Without getting it checked out, they went directly to the lair of the local scourge, a Green Dragon, and and attempted to engage him. That right there is likely enough to warrant a TPK, I suppose.
I’ll give them credit, though—for a bunch of 2nd-levels, they didn’t go down without a fight. This was a young dragon, and the fighter and cleric put some hurt on him before dropping. The illusionist really didn’t utilize as I thought she could have, and was an early out regardless (not much HP and acting like a warrior will have that effect). The fighter was perhaps most effective, using the terrain, confounding the dragon, and attempting to make a covered, fighting retreat when things turned south. But he didn’t make it out in time.
The only one to survive was the thief, who bungled the approach to the lair and fled. Not the most popular person at the virtual gaming table right now, I warrant, but the only one with a live character.
I know the players were at fault for so easily believing something is a major artifact without proof or checking it out, but I do think perhaps I should have broadbast the Green Dragon’s danger level a bit more clearly earlier on. Then again, in whatever state of mind they were in, I don’t know that would have helped. A peril (feature?) of sandbox play is you can set out as many warning posts as you want, and nothing short of character death will serve as notice. It's an extreme form of organic boundary, but it happens.