Whilst playing Kerbal Space Program recently, I've been thinking about the different types of progress characters in games, in both video- and pen & paper RPG, make towards overcoming challenges set by the game or a game master better. Here's what I've come up with regarding character growth in games.
Three types of character growth, actually, if you completely disregard story, lore, context and all these things that get in the way of talking about pure game-mechanics. Of these three types of growth, only one is immanent in the game itself, which is the first I'll talk about here: Character growth.
Character growth in this context has nothing to do with story and personality of your avatar. It's more or less just your avatars abilities that increase over the course of a game (sometimes as a reward for playing, sometimes as a part of the story progressing, sometimes it even regresses, taking abilities away from you). In its more simple forms, this aspect of character growth may just include getting extra lives (raising the survival ability of the character) in or different guns (raising fighting abilities) in an old arcade game, in more modern contexts it can be included in the 'RPG-Mechanics' that even a lot of modern first-person shooters have, having your character learn new moves and/or change their game-internal stats. When applied to a pen & paper environment, this is one of the main appeals for many 'a hack-'n-slay type RPGs, where players love to gain XP to upgrade their stats. If character growth were the only character progress implemented in a game, we'd get Progress Quest in the process.
The second type of progress in your on-screen or at-the-table abilities is theoretical knowledge on how the game works. This type of progress can be had by experience alone, with the player just figuring out what does what (like how I and several hundred now deceased Kerbal astronauts figured out how getting into an orbit and then changing said orbit works) and what kind of strategy works good in what situation, but it's also possible to read up on things or have them explained by someone else. This type of knowledge can be incredibly important in some games, such as turn-based strategy, and is vitally important in most other games that have some complexity. Even something simple like Asteroids has the need for you to figure out that destroying all the large asteroids and then the middle ones and then the small ones is going to leave you in a horrible mess of small debris, which can be considered a bad strategy. Quick-time-event based games lack this sort of progress, as there are direct instructions on what to do on the screen. In pen & paper RPGs, this kind of skill will enable one to build a character that is more effective at what they do by taking in account different attributes and skills that work well together. Do it to much and you're a powergamer.
The third and most basic type of progress is player skill. This, of course, only applies to games where skill other than tactical thinking is required, but that is most of them. Player skill can pretty much only be acquired by a combination of inherent talent and lots of practice, as the professional video-gaming community shows. You can know however much you want about the intrinsics and builds of StarCraft II, without skill you're still a nobody when it's going against high-level players who click on things faster than the average person can look and have the hotkeys remembered in the very muscles of their fingers. This kind of learning has become somewhat less prevalent in a lot of more recent main stream gaming single player-campaigns (although the recent retro-trend is going against that), enough so that I was genuinely surprised when, after several hours of playing Spelunky, I realized that making it to level 5 was no longer the near-impossible task it had been at the beginning. Even a cerebral game such as the Kerbal Space Program that inspired me to this article, can have a decent necessity of player skill in it - I learned that after I had designed a lunar lander that didn't have the autostabilizing SAS-module and had to stabilize the landing-process by hand. Rest in peace, Kerbonauts...