Morality is a key part of the Mass Effect experience, and BioWare has announced that it will work slightly differently in Mass Effect 3 compared to the two previous games. Your Shepard won't have to be a fully Paragon or Renegade character to experience all of the dialogue options - instead, reputation is all that matters.
Patrick Weekes explains that Shepard will now have a reputation bar (viewable from within the character menu) that increases when you commit any significant action - regardless of whether it's a 'good' or 'ruthless' decision. This indicates how well known you are throughout the galaxy in general. However, Paragon and Renegade options influence the red vs blue proportion of the bar, and only reflect genuine choices you make rather than inescapable story actions. The ratio of Paragon to Renegade will influence how you're viewed/loved/feared as opposed to how famous you are.
This means that Shepard will never become a villain - rather, renegade decisions will cost you friends but may result in quicker and more efficient resolutions to problems. What's more, the overall reputation score will be used to calculate Charm and Intimidate checks.
From the blog update:
- "There’s no penalty for mixing Paragon and Renegade: In Mass Effect 2, if you wanted to get the hardest Charm options, you had to play an almost completely Paragon character. We intended many of those Charms to be fun Easter eggs, but many players felt like they had to play pure Paragon to avoid being penalized by the loss of a dialog option. In Mass Effect 3, your Reputation score determines both Charm and Intimidate options, and that score is determined by adding your Paragon and Renegade scores together. You’re still rewarded for being a completionist player and doing as much content as you can, but you can do it as a Paragon or Renegade player without penalty."
- "We now have non-flavored Reputation: In Mass Effect 2, after a mission that didn’t have any major choices, we would give both Paragon and Renegade points, to show that even without a major decision, Shepard was more famous and had more influence as a result. This confused some players and made others angry – people who wanted to play pure Paragon didn’t like getting rewarded with both Paragon and Renegade points. In Mass Effect 3, whenever there’s a mission with no major decision, you will get Reputation points that add to your overall score but don’t carry a Paragon or Renegade flavor. The bar on your screen will grow, but the Paragon/Renegade ratio will remain unchanged."
You can read more over at the BioWare Blog.