In the interest of making things more “realistic” at the expense of ease-of-play, let’s look at what may happen if armor, instead of making you harder to hit, made it harder to HURT you.

Damage Reduction Armor

Let’s face it, it is far easier to hit somebody in clunky platemail than it is to hit somebody nimbly avoiding your attack that’s wearing a pair of swim trunks. The real protective value of armor lies in its ability to absorb damage

How about instead of Plate Mail having a +8 AC bonus, it if had a 8/+1 damage reduction? Good Luck hitting a well-armored opponent in full plate! You’ll have to inflict 9 damage to stratch the sucker!

Perhaps for every magical +1 to a suit of armor, the damage reduction improves by +1/+1, so a suit of +2 Full Plate would leave your AC unaffected, but have 10/+2 damage reduction!

Problems

This would make it nigh-impossible to harm somebody wearing +4 Full Plate unless you’ve got a seriously potent magical weapon: 12/+4 damage reduction is nothing to shake a stick at.

Shields… Would a shield then add it’s AC bonus to the damage reduction as well? a +4 Full Plate with +4 Large Shield would offer 18/+4 damage reduction? Now even a phenomenally strong person is unlikely to harm this juggernaut, and only mildly on a critical.

Location-Specific Armor

In other RPGs layering armor onto yourself doesn’t make you harder to hit, it just makes the hits you deal out do less damage. In Cyberpunk, armor has Stopping Power and only covers certain body parts, allowing for called shots to bypass the sternest of Flak Vests (shoot the arm, not the chest: no armor there).

But there is no proper mechanism for a “called shot” in D&D these days. And there is no “random body part” determination technique that adequately covers the wide assortment of creature types available in a game of Swords and Sorcery. Second Edition D&D tried this with their later expansions, with table upon table of location-specific critical charts. It didn’t work, unless you’re the type of gamer who likes spending all of his playtime paging through the rulebooks.

Crits Bypassing Armor

How about any critical blow bypasses the damage reduction? On a natural 19 or 20, a 1st level character with a Longsword would be able to do full damage.

The main problem with this would be that a weapon such as a Scimitar would become outstanding weapons against well-armored foes, especially a keen one in the hands of somebody with the Improved Critical feat. Such a warrior would be capable of consistently cutting his opponents to shreds with his *2 crits

A possible workaround would be to tweak the critical threshholds themselves. Perhaps reducing the multiplier by 1. This way a Longsword or Scimitar would do full non-reduced damage on a crit, whereas a Warhammer or BattleAxe would do double non-reduced damage on a crit (but only on a natural 20)… It would certainly give a glimmer of hope to those not armed with magical weapons against armored foes, but would make armor far more effective in normal combat.

Summary

A good non-math-intensive solution will likely involve splitting the existing AC bonuses granted by a given type of armor into an AC bonus and a Damage Reduction stat. Perhaps a 50/50 split with any remainders going to the Damage Reduction (as in the case of chainmail).

If Criticals were to bypass the damage reduction of armor, but with a reduced damage multiplier, I think it may work out ok. Only playtesting will tell. As for Sneak Attack damage from theives… The whole premise of them is a well-placed strike, so I would consider all sneak attack damage immune to the damage reduction (the base attack itself is still subject, though).

Since an accomplished Fighter type is likely to be striking just about anything that gets near him (a lvl12 Fighter out of the DMG’s NPC template section only needs to roll a 9 to hit somebody with an AC of 25), reducing the AC bonus isn’t that big of a deal. The damage reduction, however, greatly helps survivability of accomplished warriors versus small-fry opponents.

Example

• Man wearing Full Plate +3 with a Greatsword faces down a Fighter with a +2 longsword and a Rogue with an unenchanted Short Sword
• The Fighter attacks, hitting against the opponent’s AC of 15 (10 + (11 / 2)) easily. The fighter rolls a 3 for damage, and does a total of 7 (roll of 3 + 2 magical sword + 2 strength bonus), which is reduced by 6 by the opponent’s armor. Maybe he shouldn’t have brought a +2 sword up against an opponent with +3 armor
• The Rogue takes this opportunity to Flank the opponent. He makes his attack roll against an AC of 15 and hits, though only barely. He rolls a 2 on his damage, doing a total of 3 (roll or 2 + 1 strength bonus). None of this damage is applied to the opponent. However, the Rogue’s full 3d6 of Sneak Attack damage goes through normally, to the tune of 13 damage. Pow!
• The opponent clobbers the Rogue a little bit with his greatsword
• The next round, the Fighter takes anothe shot and POW! Rolls a 19 for a critical threat. His second roll beats the opponent’s AC of 15, for a successful critical hit. The Fighter rolls a 6 on his d8, adds his magic and strength bonuses, and does 10 damage. Take that, Mr nasty-pants!

It probably needs some work.