you can not have much of a story without a setting.
I'd say you can't have a campaign or adventures without worldbuilding. I think almost all RPGs come with a good amount of pre-packaged worldbuiling included.
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If GMs don't put work into their own worldbuilding, then they are getting theirs of the shelf.
Worldbuilding is not a catchall for fiction creation, it's a specific activity used to create a setting absent the characters. I don't need to know a thing about the PCs to engage in worldbuilding -- look throughout this thread for statements that it's the player's job to align their PCs with the setting. I can, however, create fiction quite easily while engaged in play, and that can, at the end of the day, result in a vibrant world the characters interacted with. However, the difference here is that the fiction is created to engage the characters, which is not how worldbuilding operates.
Look to how FATE works, with collaborative setting that hinges on the characters, for one options. Another is to start with a genre or set of tropes, make characters, and the start play with those characters in a tropy opening scene and then build out from there in play.
Only because a bunch of tropes likely familiar to all the players does a ton of work for you. You aren't "not world building" when you say "big fantasy city" and leave it at that, you are just letting the players fill in the gaps with assumptions based on their preferences and experiences. That's efficient in its way, but it does pose the danger of folks internal image of the "big fantasy city" not aligning with one another's or yours.
I think Ovinomancer suggests a quite reasonable way of avoiding the "danger" of trope/genre collisions: some sort of collaboration or consensus, either in building the setting a la Fate or agreeing on genre and tropes. The last three sessions I've played have each been "beginnings" - a one-shot of The Green Knight, and first sessions for Burning Wheel and for Agon 2nd ed. The first and third of these put genre front and centre - Arthurian romance for the Green Knight; The Odyssey or The Clash of the Titans for Agon. In neither case did the players have trouble conceiving of their PCs or making sense of the setting.
BW is a bit broader in its possible genres, but my fellow-player and I (in a two-player/co-GMing game) still had no issues. I said I wanted to build a (Silmarillion-style) Dark Elf. He said fine, and that he would build a Weather Witch and make sure he had a lifepath in the Outcast setting to make sure it made sense that our PCs paths might cross. I framed an opening scene in which we were both disembarking from a ship, and the ship's master was refusing to pay the crew; and we agreed that the port was Hardby, which is already established in our play as a typical/all-purpose S&S city in the middle of the Greyhawk maps.
If in due course our internal images diverge, and it matters, the system has plenty of mechanics for resolving that: a Duel of Wits between the PCs; or Circles or Wises checks (so that the acting player's conception will prevail on a success; and that of the other player, wearing the GMing hat, on failure).
Upthread I contrasted worldbuilding as (1) an element of play, (2) a resource for play, and (3) an activity that is fun for the worldbuilder but largely independent of play. I take Ovinomancer to be saying that (1) may be a mode of setting creation, but isn't
worldbuilding at all. I'm not too fussed about labels; my main point was that in the context of a discussion of worldbuilding and RPGing, the creation of setting (which might be taken to be an instance of the "building" of a "world") can be an element of play.
If we confine
worldbuilding to my (2) and (3), and if we then set aside (3) as largely irrelevant to play, we can think about how setting creation in advance of play can create a resource for play - ie the setting in which situations occur. The sort of model Ovinomancer seems to have primarily in mind - ie creation by the GM independently of the players, even with an expectation that it will generate normative weight for the players eg in PC building - is one. It's not the only, though. There can be player creation in advance of play (eg the player details his/her PC's background, thereby establishing elements of setting that matter to play). There can be GM creation in advance of play but having the players, and their characters and their play of their characters, in mind. This is how Apocalypse World suggests the GM go about creating setting elements,
after the first session (which is expected to have a whole lot of my category (1) stuff taking place); and is roughly the approach I've used in my Classic Traveller game. There can also be GM creation of setting elements that are independent of particular players and their PCs, but not independent of situation: this is how The Green Knight, Prince Valiant, and Agon (for instance) all approach scenario design.
A further issue, which is related to
who authors setting and
what they have regard to in doing so but isn't the same as those things, is
how the setting relates to action resolution. Does it provide a whole lot of
answers to action declarations? Ie the GM knows what is there, and how things work, and tells the players. Or is it mostly for framing? Which is how the RPGs I mentioned at the end of the last paragraph use it (although The Green Knight does have evaluations of Honour/Dishonour predetermined and independent of play).
I would say the main function of worldbuilding is to create situations. And great worldbuilding creates consistent situations.
When we look at other forms of fiction like books, movies, tv shows, and videogames, I think what mostly makes us think "I would love play in that world" really is "I would love to be in that position and deal with this situation in a game". When a world is engaging and captivating, it's because we start to recognize that there are certain rules for how things are happening in this world. And by learning these rules and patterns, we can understand what the protagonists are doing and why they are acting the way they do, and we can anticipate what will happen as result of that.
When the Emperor tells Luke "Let your hate flow!" and we want to shout at Luke to not give in to his anger, we feel engaged because we have learned how the Dark Side of the Force works. The realization that we understand what's going in a situation that makes absolutely no sense to someone who hasn't been innitiated creates a very rewarding experience. Especially when we're in an RPG and we can actually use our new understanding to gain an advantage.
I think great worlbuilding challenges the players with a setting in which events happen according to certain patterns that are not automatically obvious, but which can be recognized and understood by interacting with the world. And the greater the understanding is, the more efficient the PCs can act.
I think the main application of this is to have consistent and understandable patterns for how certain types of people in the setting tend to react to certain things. When players are able to recognize to which faction, culture, or society an NPC belongs, and can make informed predictions for what kind of things will make that NPC happy, proud, agreeable, angry, or hostile. When you have a good guess how you can steer NPCs to perform certain actions. To bribe, scare, or fool them.
This can be done by basing these things on a backstory for whatever group an NPC belongs to, but that backstory can be really very short and simple.
I agree that the main function of setting/worldbuilding, in RPGing, is to create situations - and that excitement about
playing in a world means (at least typically)
excitement about the sorts of situations that world engenders.
I'm less keen than you on the "discovery" aspect, though. At least in my case, I don't really think it's about pattern-recognition and getting gameplay benefits from that. Eg when I've run games set in Middle Earth or The Marvel Universe the appeal hasn't been the sort of deciphering you describe, but rather the situations and characters - eg in the Marvel case War Machine fighting Titanium Man in an awesome aeriel duel; in the Middle Earth one Gandalf with a group of hangers-on leaving Rivendell to follow up rumours of a rediscovered Palantir. It's the tropes and situations in themselves which are fun!