Special transformations are pretty common in many videogames, particularly in RPGs, these days. By "special transformation", I mean the ability of a character to enter into a special state where they possess increased stats and/or more powerful abilities compared to normal. Including this kind of effect in a game can add a lot of variety to gameplay, and help make major battles more dramatic and exciting. However, if the price that the player pays in order to use the transformation is wrong, it can have a negative effect on gameplay. If the cost is too cheap, the player will use the transformation in every battle; too expensive, and the player will never use it all.
The reason that I thought of this topic is that I noticed that my brother occasionally kicked himself for not using Metis' Neo Orgia Mode during regular battles in Persona 3 FES. Neo Orgia Mode is a pretty potent transformation: it significantly increases Metis' stats, renders her immune to most status effects, and makes all of her spells and special attacks free, and it only has two limiting factors: it can only be used for four or so turns, and Metis operates under a more limited AI routine during Orgia mode. The turn limit doesn't really do much to limit Neo Orgia mode's use, since most regular battles in Persona 3 can easily be cleared in one to three turns. The turn limit only really applies in boss battles; since Metis becomes unable to act and vulnerable to attack after the timer runs out, the player is limited to using Orgia mode only at the end of a boss battle, often when the battle is in wrap-up mode. The main reason not to use Orgia mode in regular battles is that Metis doesn't fight very effectively while powered up. In my opinion, the added power and free use of spells more than makes up for that most of the time.
A game with a transformation system that works similarly is Shadow Hearts. In that game, the main character, Yuri, can transform into a demon to gain increased stats, elemental affinity and access to powerful magical spells. Whenever Yuri transforms, he has to pay a price in Sanity points based on the power of his demon form, as well as an upkeep cost at the end of every turn. However, since Sanity points fully recover at the end of every fight, and there are no other abilities which cost Sanity points, Yuri's demon transformations function in more or less the same way as Metis' Orgia Mode: a turn limit the player doesn't want to go over. Because of that, there is literally no reason for the player to not transform during every battle.
Is being able to transform during every battle a bad thing? In my opinion, it takes away from a very important effect transformations can have on a game: dramatic tension. Beyond just serving as challenging tests, boss fights are exciting because they are the dramatic climax to a stage or story sequence in a videogame. The player going all out with the abilities and powers at his disposal is a big part of the excitement and drama that occurs during a boss fight, and special transformations are a way to give the player a very tangible way of feeling like he is holding nothing back. So there would be nothing wrong with transformation systems that can be used all of the time like Persona 3's or Shadow Hearts' if they gave the player access to bigger and stronger transformations than usual during boss fights. Unfortunately, they do the opposite: the player has to hold back more than usual during a boss fight.
One system that gets it more of less right is the Dragon transformation systems from Breath of Fire 3 and 4. In both of these games, Ryu can transform into a powerful dragon form by paying a flat Ability Point cost during initial transformation, followed by a smaller upkeep cost every turn. Unlike Sanity Points in Shadow Hearts, a Breath of Fire character's Ability Point total is kept between fights, so the player can't go around freely using transformations if he wants to still be able to do so during the next boss battle. However, since the player has access to several levels of transformation with various costs, it is possible to afford using a weaker transformation during a tough regular fight. The biggest flaw of this system is that Ability Points are also what Ryu uses to cast spells, both in and out of his transformed state. So if the player wants to use Ryu's regular magic spells, he can't afford to transform (this was particularly problematic in BoF 3, where Ryu was the best healer in the game).
A very different system that also works well is one where the player has to spend turns accumulating power in order to transform. A good example of this is in Wild ARMS 2, where the player can spend 100 Force Points in order to transform Ashley into the powerful KnightBlazer. A similar example is Xenogears, where a mech has a certain chance to enter Hyper Mode after making a non-deathblow attack once it has achieved Attack Level 3. Both of these cases share two things in common: activating the transformation requires several turns of effort, and attempting to transform involves holding back with some other power. What this means is that, while the player can use the transformation in any battle, it is usually quicker to beat regular enemies with more mundane means. However, these transformations are a major factor in any long-lasting boss fight.
One factor that I like about transformations that are not designed to be used in every fight is that they can be used as a safety net of sorts if the player runs into a really tough random battle. For example, my brother used KnightBlazer to bail himself out of trouble when a random battle went against him quite a few times. It is somewhat comforting to have a powerful trump card to fall back on when an enemy turns out to be surprisingly difficult.
Perhaps the single best transformation system I have ever seen is Devil May Cry's Devil Trigger system though. In DMC, the player has a Devil Trigger gauge that is used for transformation. As long as Dante has at least 3 gauges filled, he can transform at any time, and once he transforms, the gauge begins to empty. The genius of it is that the gauge recovers quickly enough that the player can afford to use it during battles against tough groups of regular enemies, and even use it multiple times during a boss fight. However, the gauge recovers slowly enough, coupled with the minimum energy requirement, that the payer is strongly encouraged to be conservative with the Devil Trigger gauge. The system works beautifully.
There are a few ways to make transformation systems way too expensive to use. In particular, the price of giving up actions is not to be underestimated. Even if the price of transforming is simply giving up a turn for the player to actually transform, that may be enough for the player to choose against using the transformation, particularly if the player is in a crisis situation. Even more problematic is forcing the player to use only one character out of an entire party during a transformation as is the case with Breath of Fire 3's Behemoth transformation or with Final Fantasy X's Aeon summons. Going from three characters to just one results in significantly reduced combat power and adaptability. Unless the resulting transformation is extremely powerful, it generally isn't worth it.
A kind of transformation that is particularly bad is the kind that the player has no control over. Final Fantasy IX's Trance system is particularly bad, since it is an ability that takes a long time to build up, only to activate when the player least needs it. Another game with a similar system is Tales of Symphonia with its Break system.
There is a lot more material I could talk about, but I think I will cut it short here. My brother and I will probably be talking about this topic some more over the course of this week.