That's a pretty loaded question, tbh. Powerups are utilized in such a variety of ways for a variety of purposes.
Take Mario for instance. The powerups are not only deterministic in that you get stronger with each successive level, they also function as a health system. Each "level up" on the powerup scale puts you one step farther away from failing a level, barring insta-death mechanics. Consistently playing well can help maintain not only a more powerful form, but a security blanket as well.
Contrast this with Star Fox 64. The laser powerups are also tiered, but your ability to maintain them is more contingent on your skill since they provide only a damage boost. Pure health is treated independently and, if you sustain too much damage to your wings, you lose the laser power. At that point, laser powerups turn into wing repair pickups, but even then your health pool is still separate. Powerups are not "get out of jail free" cards the same way they are in Mario.
In Star Fox 64, you're expected to take damage on a more consistent basis, so it makes sense that you don't lose powerups for each piece of chip damage. In Mario, there is more emphasis on individual enemy hits, making a powerup-health tie-in more relevant and sensible.
Those are just two examples. Can you provide some more detail on what your game is going to be like?
Thanks for the reply.
It's a VR game that is going to be a cross between Star Fox and something like this:
So it will be like star fox in a sense that not every enemy is going to just stay there until you kill it, it will attack and fly off, it is level based and with incoming obstacles for you to maneuver around. With a boss character at the end of the level.
And it's like Xortex such that your controller is the ship and enemies come in waves.
For my game...
There will be enemies that will have multiple hit locations and different attack patterns and health. And I want to make weapon upgrades a core gameplay mechanic. Maybe provide temporary special weapons such as a second auto turret for a few seconds. I am still not sure how much health to give the player if it should be 3 hits and die or more. But there have been occasions where the ship takes lots of damage because i do want to throw a lot of different enemies by waves.
Right now I have your classic health powerup, and bomb powerup (destroys all enemies in the screen), like of like games like the top down shooters 1942 or Twin Cobra (oldies). I have a time slow powerup that slows down time for 5 seconds, seen in the below video to help with the horde.
Here's an early prototype of the game i am making, just focus on the gameplay, all models are just placeholders for now