You simply want a different failure state rather than a respawn or reset

Continuation like in GTA or Dark Souls aren't exactly failures, I mean you fuck up but it isn't a "you failed the game, go back to a time you didn't fail the game" but "you failed at staying alive but all these other actions you did, yeah those still persist". So those fails aren't fails, they are part of the design, getting caught by cops in GTA isn't a GAME OVER, it is getting caught by cops, going to a police station, them confiscating all your guns and you continuing. In Dark Souls, dying and going back to a bonfire is a part of the lore (that I can't remember in detail right now). In Crusader Kings 2, death is natural. So I'm saying, I wish more games didn't have "fail states" at all but death, fuck ups etc. were part of the game, not "you failed, go back!"

David Cage was stating that if a videogame ever failed in a game, then it's because the game designer failed, not the player.

I don't understand this sentence?