Small Complaint Incoming
This is something I don't understand. Okay, yes, dungeons are five-man-content. Okay, yes raids are more than five, but why are raids more end-content and dungeons not? Why do raids give better loot than dungeons? Is it because raids are harder? Most often, yes - I guess. Is it because raids require more people? Is it because just hearing the word >>raid<< has something to it? The aesthetics or something?
It Could Be Different
Alright, now that I've got that off my heart. Let's imagine an MMORPG. Alright, you start leveling as usual - okay with me. After some time spent you reach the point where you can do dungeons. So you obviously do some dungeons while leveling at the same time and then you reach the maximum level. You find a group or a guild and you enter dungeons to get "ready" for raids.
A bit of a hassle, but later you're equipped and ready to go - ready for raids. So you start raiding enjoy your first raid. At some point you have content-clear. Luckily the developer brings out a new expansion pack. What does it include? A new dungeon and a new raid.
And here's where things get interesting in my opinion:
With this new content update, we're implementing a new end-game dungeon and end-game raid. You will be able to do this dungeon after completing the first raid, getting your equipment to be able to do the second raid.
Or if we want to go without power creep:
With this new content update, we're implementing a new end-game dungeon and end-game raid. The dungeon will implement the concept of the new mechanics of the raid. So if you want to practice these mechanics or do not find a raid group you can try this challenge instead.
I'd dig that. So let's look at the difference between a raid and a dungeon?
Raid vs Dungeon - What's the difference?
A dungeon is usually a single instance that contains enemies and mini-bosses as well as an end-boss. It is usually a five-man-content but Guild Wars 1 also goes with an eight-man-composition.
A raid, on the other hand, is usually a single instance that contains enemies, mini-bosses, bosses and an end-boss. Usually, you have ten or more people who do this.
So let's ask again...
Raid vs Dungeon - What's the difference?
The number of people and the number of bosses.
Technically we could say raids are bigger dungeons.
Innovation
A dungeon can be more difficult than a raid by adding horizontal difficulty. Make some dungeons that implement different not yet seen mechanics and make the raid implement a handful of these mechanics, but at the same time, combining them.
I think the design idea of having dungeons -> raid -> dungeons -> raids -> dungeons -> raids is much more appealing. Also, dungeons take less time to develop than a raid. Even better having created dungeons and use those boss mechanics as the base for the raid bosses doesn't have you implement completely new mechanics. Just make sure it feels different than the single mechanics of the dungeons, though it's not bad to feel familiar. You could even change the mechanics a little bit to feel similar yet different. (No one likes copy & paste :P)
Dungeons Only Works Too
Guild Wars 1 is a game that did not have any raids. And it didn't need raids. You had always eight-man-groups in end-game areas. Dungeons were already difficult and that's just the start. Aside from normal dungeons, it had hard-mode dungeons and elite dungeons as well as elite instances. People who have experienced the underworld or the domain of anguish know what I talk about. You don't need raids to have end-game content.Conclusion
What people want is some kind of progression. Any kind of progression.
If it's a progression through horizontal learning like in Guild Wars 2 and Guild Wars 1,
if it's a vertical progression through power creep like in WildStar and World of Warcraft
or if it's a vertical progression through learning (stacked) mechanics.
If you provide this for different sizes of groups you're good to go.