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They sort of are, except that in a lot of games, nothing has really been done to replace them.

There has to be some stakes that make death kind of intimidating, but in a lot of game, death just means you have start over a little while back. This was a problem for me in REVII. IIRC and my memory isn't fuzzy, death generally didn't set you that far back. So, in the beginning, being chased around the house freaked me tf out, but eventually when I realized death was a minor inconvenience, I was just like "whatevs".

Similarly in Mario Odyssey. I virtually never ran out of lives in Galaxy, and even when I did it was more of an inconvenience than anything. Having the player drop coins instead was a step in the right direction, but the penalty was too small to be meaningful.

Replacing lives with checkpoints has its own problems. If the checkpoints are too far, then it's frustrating if you don't get any chance to adapt to a new level and have to suffer a significant setback. On the other hand if they're too close, then dying has no impact whatsover. In these cases, lives actually may be a better solution.

For example in the last level of Odyssey, I think giving players 3 lives and some checkpoints would have been better than sending them all the way to the start of the level if they fail. This gives you a couple of chances to learn a new part without a major death penalty, then if you can't figure it out, you take the L and have to redo a big chunk of game. Lives work this way in Mega Man 11, and they're make the game better than if you could restart whenever from a checkpoint.

There are other ways to go about it of course. ZombiU's solution was pretty clever. If you die, your previous character is a zombie with all the shit you were carrying at the time, and if you don't kill them, you lost it all. Kid Icarus also had a clever solution where if you die the difficulty decreases, but so do the rewards.

So, I don't think lives are really outdated. They're one method of making failure consequential, and in some contexts it works perfectly well. But they shouldn't be used just for the sake of tradition. There are other methods that are better for different kinds of games.