They can, but it sometimes a good sign. I have run a couple of contests that lasted about 2-3 hours now. Both were fairly dramatic pieces Koschei' Baneface's assault on Spinstorm camp to bring his murderous step-brother to justice and the attack of the Night Tribe on Wintertop Fort. A lot of the time factor comes because both of these were see-saw struggles, the heroes and their opponents were about evenly matched (with hero points on the player's side balancing higher abilities on their opponents side). I hope, that in both cases, the players had fun because they had plenty of options and the fight was dramatically important. Generally for four-five players I would estimate about 1-1.5 hours for a massed extended contest where neither side is being completely reckless and bidding a huge proportion of their APs (one way to speed it up if you as the narrator dedide it has got old and boring).
It is for that reason that my rule of thumb is that extended contests should happen once or at most twice in an episode. Everything else should tend to be simple. The players have to care enough to be invovled in every blow that is struck.
But I have to agree with Simon, some contests I have played out would have been unattemptable within a 3 hour session.
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