I played a session of my game Spectre of the Beast at Vancouver, WA's Gamestorm last month, on the anniversary of the game's public debut. I played with Tyler and Johno, both SotB veterans but their first time playing with me.

Spectre of the Beast in brief: each player creates a fictional culture, somewhere in the Bronze-Age-ish range, and plays a Champion of that Culture, a pivotal person whose Ambition will change the world around them. Everyone takes turns playing scenes with their Champion related to resolving their Ambition, with the player on their left providing adversity and other players portraying supporting cast. Each time you're at a key step (roughly once per scene) in achieving your ultimate goal, you roll vs. the Nemesis player. The dice tell you not only whether you succeeded in your immediate goal (accruing Victory or Defeat Points), but also what effect your actions had on the society around you, certain die results adding points into Development Pools for different aspects of the Culture. And if you use violent or oppressive means, you get to (and indeed, MUST) add Sword dice to your roll...which can generate, not Development Points but Spectre points, meaning awful consequences to the people around you. When everyone's Ambitions are resolved, you chart the Cultures' course--Development Pools are rolled to generate Hope, and Spectre pools are rolled to generate Beast. You then roll into a new Epoch with new Champions, and repeat the process. Play continues until either Hope or the Beast hits the Fate total for your campaign, then they're rolled against each other to see if Civilization as a whole collapses or ascends into Utopia.

So the Cultures we ended up with were: Marcinea (Tyler's), cosmopolitan city-state with democratic rule and squabbling factions, the Toumleich (mine), hill-dwelling tribes of fierce goatherds, keeping to themselves and feuding between their many clans, and the Roma (Johno's), who were basically, the Roma (Gypsy) people, wandering in caravan through a migratory route year after year. The Champions were, respectively, Arilius, shrewd and articulate councilman who sought to unite the people under his rule, Chieftan Skaldach, a bold blacksmith who sought to extend trade between his village and the city-folk, and the malcontent son of the Roma's Chief Elder (whose name I've lost record of), who sought to settle the tribe against his father's wishes.

We had an engaging trio of tales with some nice dovetailing--Skaldach feuds with another clan over his desire for trade with outsiders, kills the rival Chieftan in a duel, and leads a trading expedition to Marcinea. The Roma folk arrive in the Toumleich hills to make contact with the locals...and encounter the rival (now grieving) tribe. The son almost convinces them they could coexist to mutual benefit, but ends up run out of the village in the middle of the night. Arilius succeeds in ramming through his legislative proposal for centralized rule, but then a riot erupts among marginalized ethnic groups in the Merchant quarters, and her gives the order for the Guard to slaughter the revolting civilians. Cut to Skaldach's final scene, where his men are the cause of the riots, picking a fight over perplexing city-dweller commercial edicts, which ignites the powderkeg, and the men of Toumleich are all cut down when the lethal order is given, never seeing their green hills again.

The most problematic issue for play was, and has generally been for SotB, the construction of a robust Situation for protagonists to encounter. Like, you (the individual player) make up a Culture, with whatever aesthetic and characteristics spring to mind in a few sentences, you draw it on a map, and you make a Champion with an Ambition. Then you turn to the guy on your left and say, "OK, oppose me in my ambition!" Recognizing that this wasn't much to go on, I revised setup to include the Champion player also naming an NPC who is supportive of the Ambition, and the Nemesis player naming an NPC who's opposed to it. But that still leads to a lot of scenes with just a Champion fighting or arguing with an enemy, with a sidekick providing quips, and maaaaybe some description of townspeople, soldiers and such as pure backdrop. It's as if the world consists of just one or two people, even though their actions are supposed to impact thousands. Or like a low-budget TV show set in a war or something, where truckloads of soldiers are fighting and dying just offscreen but we only see the command center and the officers because that's the only cast and set. It's especially awkward when those 1s come up on Sword Dice, and the Nemesis is supposed to describe some horrible consequence of the violence that you used. Er, OK, consequences for whom? The Champion's death is generally off the table, and the two NPCs named may or may not be plausible targets based on how the conflict's framed. SO if those don't work, the group had BETTER have a robust cast fleshed out, and the game doesn't really help you there. In fact, after this playtest, I noted some violence consequences I really liked, and made the note that the consequences of 1s on Sword Dice have to be, not just "really bad," but specifically personal--the bloodshed hits home in some way, impacting the immediate circle of the Champion character (whether the Champion actually cares about it is another matter!). In which case I need to make sure the immediate "gameworld" sketched around the Champion is robust.

In a thread awhile back, Paul Czege noted that this was a problem in his playtest as well. He wrote,

Paul wrote:
As a player, I want to feel like my Champion is amid a situation that's pregnant with consequences, if I don't pre-empt them, and rewards, if I can just grasp them. I don't want to spend my time authoring goals and fabricating conflicts. (I'm lately increasingly irritated by workshoppy games.) I want to be surrounded by circumstances that compete for my attention, by too many options to address.

I'm not very familiar with this sort of roleplaying but it seems to me that if you want robust supporting characters they need to do something tangible in the game.

Because it seems to me that what you are describing is a world where only 1 person exists in each civilization any meaningful way.

Here is what I would do (and feel free to ignore this).

1) The players define a Civilization and a Champion
2) The players pick N number of resources for that Civilization.  For example an army unit could be one resource.  Rich farmlands another.  A wise adviser a third.  You can let the players come up with whatever they want so they are not just choosing from a list.  The players then get to attach a "bonus" to that resource, based on a fairly generic list.  So for example a player could attach an extra sword die to an army unit.  A extra victory point to farmland.  One less defeat point to city walls or whatever.
3) The NPC works the same way but is a little bit better (maybe two bonuses instead of one).

Now you have kingdoms with more then one focus.  When a player reaches a key step they can get the bonus by involving a resource in some way but they also risk losing it as a consequence of a bad roll.

Finally the Nemesis player can elect to involve one of the Champions resources as well.  The champion gets the bonus but if anything goes wrong that resource is the first to go.

I've encountered what I think may be a similar problem in design of my Supers Chess game.  I haven't tested it yet.

What I have in place to deal with self-created challenge woes is an allowance for PC main characters to jump into any space (and therefore scene) part way through the narrative if there is a reason.  In Supers context, it's something like Batman showing up to thwart the Joker from halfway across the city. 

In your game, you might do something like allowing players to create a reoccurring "Challenge PC" based on issues that they or their Culture care about.  Sort of like someone who represents a kind of "outside thought" within the challenged Champion's Culture, maybe even trying to pull the narrative towards things important to that player's Culture so there's some overlap. That way, they play a sort of main character role during those oppositions, and the challenged Champ's player still gets some control over setting the issue or theme that's being addressed.  I think you could still have self-created challenges as they exist now too, but this might allow the other player to have more stake, and act more on the particular parts that they are interested in. 

So to use part of the example you gave, you might have someone playing the leader of the peasant rebellion that Arilius was forced to deal with, and that guy might escape the massacre and go on to have a role later on in another conflict (and he could have appeared earlier to plead his group's case at the hearing where the piece of legislation that started the riots was approved). 

I'm not sure how far-spread geographically the civilizations are in your game, and that might pose some problems, but if it's Bronze Age type level of tech, I don't think it would be too hard to ensure that created challenges still leave the Challenge PC some leeway to get where he or she needs to be. 

Maybe any other players at the table could play a supporting role for the Challenge PC that's currently on deck?  Maybe their character is also trying pull the narrative towards issues important to that player's Culture?

I think this is all similar to what you've suggested, but I feel like holding the number of these "Challenge PCs" at one per player would help encourage people to integrate it as a kind of continuous antagonist who helps move the story and expand on the created Cultures.