You nudge your little square division to the front, compare its attack factor of 4 to the enemy's defense factor, and roll the die: ugh, a six, AL, attacker loss. You flip the counter to its reverse side, reducing its attack factor to 2. Half the cardboard men under your command are dead.
Only they're not, because as all grognards know, and as many rulebooks are quick to point out, a step loss doesn't represent death, but simply a reduction in effective fighting strength. That's bloodshed and wounds and prisoners, sure, but also general discombobulation and dispersal, exhaustion, morale collapse, and even reduced ammunition/supplies. Even a brief and indecisive skirmish can leave even the most elite units in need of rest and regrouping. Just as removing a counter from play doesn't mean that every last man collectively represented by that little square of cardboard has been wiped out, flipping it doesn't mean that there's been fifty percent casualties.
And yet step-loss CRTs are often described in terms of how "bloody" they are, and Eliminated Units are jettisoned to a Dead Pile with the appropriate lamentations and finger-pointing - "you killed my guys", not "the rigors of combat rendered my guys ineffective to the point where it doesn't make sense to represent them with a counter". One of the key criticisms of traditional hex-and-counter gaming is that it's much "bloodier" than the real thing - a perverse and ill-advised statement, to be sure, but one that is merely alluding to the fact that the casualty returns for one of our little cardboard simulations will usually dwarf the historical figures. But again, that's only true if "step loss = casualty", which it doesn't. We know this intellectually, but when we're playing the game, the opposite feels true.
Most games, anyway. Some games sidestep this by modeling gradual, incremental reductions in fighting strength, sometimes explicitly modeling different aspects of a unit's performance, such as in Ben Hull's Musket & Pike system, in which each unit can sustain escalating numbers of Formation Hits, Morale Hits, and Casualty Points. That makes for an awful lot of markers, and it's a bit too cumbersome for me as a player. (It's one series that vastly improves with its implementation in VASSAL, where all these things are tracked on the counter itself, but if I wanted to play a game on my computer, I'm probably just going to fire up my copy of Net Hack.) But the advantage of this kind of hyper-granular approach is that it doesn’t feel "bloody".
It certainly feels more gradual and natural than the kind of binary full-to-reduced, fresh-or-garbage flip you get in a two-step game. When I was designing my first wargame, I consciously avoided the two-step model, utilizing the stack-of-steps system that's been carried through into our Shot & Shell Battle Series. My choice was more about displaying the destructive power of close-range Artillery, which typically inflicts two or three losses in a single go, compared to Infantry attacks, which usually result in a single loss, but more commonly in losses for both sides, showing how exhausting such collision can be. This approach works very well I think when modeling a single battle with a stacking limit of one unit to a hex given the multi-counter modeling of individual units. It's less well suited for games modeling campaigns.
Objective Shreveport has multiple counters which are flipped or replaced as needed.
Speaking of which: we've published two John Theissen designs, with a third in the works, centered on interesting American Civil War campaigns. Units will often have ten or more Strength Points, with each loss suffered in combat sliding their SPs down by one point, ten becomes nine, then nine becomes eight, and so-on. In the first two games, More Aggressive Attitudes and Objective Shreveport!, units have multiple counters which are flipped or replaced as needed to record their current fighting strength. Given how few units are typically involved in the games - the counter density is really very light - it certainly filled up the countersheet, but it could sometimes be fiddly and onerous. Not to the same degree as Musket & Pike, but it was more physical work for the player than we wanted it to be. We thought that there must be an easier and simpler way to pull it off, and with the new game, Hood's Last Gamble, we're utilizing a separate Strength Points Track, for which each unit has a corresponding marker. This also lets us save the reverse of the actual unit counter to better deliver on the hidden information element so crucial to John's designs.
The focus on those games is really more about maneuver and coming to grips with an enemy who'd prefer not to get into a battle, thank you very much, which means that the number of battles, and the number of losses suffered therein, are generally greatly reduced. And so while a unit that starts with 11 SP might suffer six losses over the course of the game, he's still there and still has 5 SP at the end of it; the Dead Pile is a place reserved for 1 SP Garrisons and the like. And so it feels more realistic, because you don't have the sense that whole divisions have been wiped out. Instead you're left with the impression of gradual, grinding exhaustion and attrition.
Which makes me wonder if it isn't the elimination and removal of units from the map that leaves us with the feeling, despite all our knowledge to the contrary, that our guys are "dead" instead of merely wandering from hex-to-hex, dispersed and microscopic, unable to muster a single combat factor or project a Zone of Control. But what's the alternative? Units that stay on the map even once they've been rendered completely ineffective, retreating automatically from every combat, like slightly more mobile versions of the "Wreck" markers into which AFVs are polymorphed in tactical games? Though, come to think of it, that could be very interesting and worth pursuing.