With all of the recent D&D 5E talk going on, I've been thinking a lot about game balance. I was recently in a debate on the WotC forums about spotlight balance (different characters shine in different situations) and the possibility of it co-existing with combat equality (all characters being of roughly equal competence in a fight). I was arguing that the two were compatible, while another poster insisted that spotlight balance required some characters to be better at combat than others. Different editions of D&D handled this differently, with 3.0/3.5 having characters with drastically different power levels in combat (note that this edition didn't achieve spotlight balance, since oftentimes the strongest classes in combat also dominated out of combat (OoC) (which is to say, Clerics, Druids, and Wizards). Earlier editions came closer to the spotlight balance concept, for example in 1E the Thief wasn't all that great in a fight, but he was the only one who got skills. In 4E the whole notion was done away with, as a major design goal was having all classes being (roughly) equally valuable in combat (though obviously in different ways). The Bard exemplifies this very well; it's one of the strongest classes in 4E so Bard players clearly don't have to sacrifice combat ability in order to be a skill monkey (most notably an extremely capable social character). For all its combat equality, however, 4E doesn't do a particularly good job of highlighting OoC utility (or at least there aren't any classes that specialize in it to a great extent; for example, the biggest mechanic is Rituals, and every class can get them).
But enough about D&D. None of the editions have done a particularly good job of achieving spotlight balance. The One Ring, on the other hand, seems to hit the mark pretty well, and what's more it seems to be designed with the principles that I was arguing for in mind - spotlight balance without sacrificing combat equity. The big disclaimer here is that I haven't run a game yet, as I just recently purchased the books. I have, however, read through both core books, and went back to read some of the more important sections several times. I've had enough time to digest the mechanics, build some sample characters, and research the experience of others so that I have a pretty clear idea of how the game generally works. Also, balance was at the front of my mind as I was reading through a lot of this.
So how exactly is balance achieved in The One Ring? For starters, I think it will be helpful to briefly describe the combat and OoC mechanics. Pretty much anything that a character does (in terms of rolling; obviously narrative role-playing adds more dimensions not necessarily covered by mechanics) is achieved through the use of skills. The Common Skills are usually used OoC, but in certain situations may be used in combat. There are 18 of them, so there's plenty of variety. Common skills are organized in a grid, with columns corresponding to the 3 basic Attributes (Body, Heart, and Wits) and rows defining the skill groups (Personality, Movement, Perception, Survival, Custom, and Vocation). In other words, there's a skill associated with each attribute in each of the 6 groups. In combat you rely on your Weapon Skills, which are self-explanatory.
Each culture is balanced against each other by virtue of their starting ranks in the different skills. A couple of Common Skills are specialties of a given culture, and characters start play with 3 ranks in those skills, while other skills important to that culture are given starting ranks of 2 or 1. For example, Hobbits get 3 ranks in Stealth and Courtesy, Woodmen get Healing and Explore, etc. Each culture has a handful of skills that have 0 ranks by default. Though the specific specialties of the different cultures vary, each has a few areas where they innately shine. Pretty straightforward spotlight balance. A Hobbit is naturally great in situations requiring stealth, while a Dwarf is better off staying behind so as not to give the group away. The Dwarf is much better at Craft, though. What is very interesting, however, is that all cultures start out roughly equal in their weapon skills. Each culture has a choice between 2 skill sets, which is usually 1 rank in dagger, 1 rank in a secondary weapon, and 2 ranks in either a single favored weapon or a cultural weapon group. For example, Beornings can choose to start strong with all axes (axe, great-axe, and long-hafted axe) or just Great spears as a favored skill. Going for the more specialized choice of the favored skill isn't always the best choice since it might not be the best weapon for everyone (for example, a Beorning who wants to use a shield would be better off with cultural training in axes to wield a L-H axe 1-handed, and such a character would also have a ranged weapon for opening volleys; the secondary weapon for the Great Spear specialist is an axe, leaving the character with no ranks in a ranged weapon). But I digress. The point is that each culture makes a similar choice; even Hobbits start out with 2 ranks in a primary weapon, 1 in a secondary weapon, and 1 in dagger. No cultures have a tradeoff of fewer ranks in Weapon Skills for more ranks in Common Skills, hence spotlight balance with combat equity is achieved.
I should mention that all characters get some free points that they can use to add skill ranks as they choose at character creation (so a Dwarf can start out with a good Stealth skill, if the player wishes). The amount of points is relatively small compared with the starting ranks that your culture gives you, but this is one area where a player can choose between combat and OoC, since these points can be used to raise any combination of Common Skills or Weapon Skills (though weapon skills are more expensive).
What really ensures a clean division between combat and OoC (common and weapon skills) is that as a character gains experience, the two kinds of skills are improved through different pools of points. Experience Points can be used to increase your ranks in Weapon Skills, or to increase Valour or Wisdom. Each new point of Valour grants you a new Reward, and each new point of Wisdom grants you a new Virtue. Whether you're getting weapon skill ranks, rewards, or virtues your XP is usually going to directly affect your combat abilities (there are a handful of virtues that are non-combat, but by and large you're going to become a better warrior by spending XP). Conversely, Common Skills are improved by spending Advancement Points, which are awarded during play by actually using your skills to great effect. By improving combat and OoC options through different pools of points the two systems don't directly compete with each other, so you'll rarely have to sacrifice your skills as a fighter in order to be better with your Common Skills.
Without playing it's tough to say whether this balance is successful in practice. There's a lot of variety in the different Rewards and Virtues, and some will inevitably prove more useful than others. Sometimes it will depend on the type of campaign, or even the creativity of the player (the virtues in particular seem to be more open-ended). Some are situational (better during long journeys, in certain environments, or against certain enemies). The value of your Valor or Wisdom rank itself also adds a layer of complexity, and it's still unclear to me how that will affect a character. For example, failing Fear tests (based on Valour) will be a disadvantage in a specific combat (cannot spend Hope), but failing Corruption tests (Wisdom) usually means you get a point of Shadow, which limits the amount of Hope that you can safely use (dropping below your Shadow score makes you miserable, and VERY bad things can happen when you're miserable).
So as with any RPG, the amount of variables precludes the possibility of perfect balance, but that's ok (and expected). The One Ring does a good job of striving for as much balance as possible, with the apparent goal of promoting spotlight balance while ensuring combat equality. From what I've read so far, it seems like the endeavor was largely successful and I'm very impressed with the system overall (not least because it aligns with my own preferences in a game)!