Structuring In-Game Economies

First, a Happy Valentine’s Day to everyone!   This is going to be a long article… fair warning, grab a cup of coffee, a pen and some paper… and some dice.  Then roll Initiative!  We’re gonna have fun!

With in-game currency being such a vital component of the freemium model, considerable effort is deserved on structuring a game’s economy.   An otherwise great game can fall apart if an economy is all out of whack.   A lot goes into creating an MMORPG, for example, character creation and customization, environment and graphics, combat and movement dynamics – those can all be fantastic, but a broken economy diminishes player enjoyment if rewards are too great or too little.

There’s nothing new here – but the topic is VAST and there is an equally VAST body of guidance on game economies which harken back to the days of Dungeons and Dragons (now a property of Wizards of the Coast).  It needs to be pointed out that Dungeons and Dragons as developed by the late, great Gary Gygax emerged from table top miniatures, medieval wargaming (i.e. Chainmail).  It also led to games like Top Secret (think James Bond), Gamma World (post apocalypse), BootHill (American Wild West), spawning countless other games by different publishers.   Most of the fundamental game dynamics were virtually the same, but customized (unique) to the setting.

The topic of “game economy” was a regular ongoing topic in Dragon Magazine with guidelines gradually codified over the various iterations of what we call D&D – whether 1st, 2nd, 3rd, 3.5, 4th or Next editions, numerous computer games, DDO Unlimited by Turbine, etc.  The original columns by Gary Gygax covered “Monty Haul Campaigns” – where in the vernacular, characters would be flying around with ancient gold dragons, +6 Holy Avengers, Rings of Multiple Wishes, millions of gold, and an Armor Class of -10.  Those were the days

As relevant to our discussion, giving out too much loot that is uber-cool frequently leads to the game master (which is you as the game designer) having problems keeping players interested — because you have to keep topping everything else you’ve given.   Conversely, a number of modules and game worlds were developed that never really caught on because they engaged to keep the game economy “too frugal”.

Game economies can be simple or extremely complex, but the basic dynamics still apply – namely,

  • moderating rewards (supply & demand)
  • providing incentive to spend
  • both apply to avoiding in-game saturation/inflation
  • requiring money sinks

Freemium, at the most basic level, considers a “game currency” and a “real currency” – spend $5.00 and get 1,000 “gems” – if you like.   No need to explain that further, as the main question is to what extent “real currency” is needed to play your game – whether designed for single players or as an MMO?

There is no single answer to this as each economy needs to factor in numerous elements such as:

  • total amount of game time relative to content
  • replayability (i.e. alts – multiple characters in an MMO)
  • range of development potential for each character attribute/ability
  • varying difficulty levels (i.e. Iron Man rules or Elite Raids)
  • competitive components (i.e. PVP, arenas)
  • number of active players

This list is not comprehensive, but it provides a lot of things to think about — that really need to be measured, quantified and in some cases, qualified through a combination of defining the parameters of each tier of game play and playtesting.

Together, these components can help establish a target “lifetime customer value” where the single most important element you will ever have is your number of active players.   For games that have them, auction houses provide a good glimpse into the relative health of a game and its economy.  If you start a new character, go to the auction house and find virtually nothing available – in the majority of cases, that is an indication that the game does not have many players.  There are exceptions to this, particularly following changes in rule sets or the adding of new game or crafting components.

Non-MMO environments have a much easier task, they don’t need to reflect the total number of users – they just need to appeal to the one player who starts playing it.    Players like to have options – the ability to make decisions that impact their game play.

In context, some developers decide to keep game and real currency completely separate.  With effort, you can get all the game currency you want.  To get the paid currency, you have to buy it.   Most of the successful games that I’ve seen, and well I’ve seen a LOT of games but nowhere near “all of them” — suffice that those that are most profitable tend to give away some “free paid currency”.   That’s critical for MMO’s as it helps to boost the total number of players – which is important for everything from grouping to keeping the auction house active.

Who is more likely to spend $1.00? 

Player One has to pay for all of their “real currency” with “real cash” regardless how much they play.

Player Two through a bit of effort earns 20 gems which is halfway to a meaningful “real cash” upgrade/item.

A lot of retail stores have already answered that question for us — with coupons, discounts and sales.   Take this in conjunction with Teasers and Tempation to develop a loss leader strategy.   Again though, as we are dealing with digital products, in some cases simple pixels, your cost, your loss is negligible.  You can afford then to generate multiple loss leaders.  The overall idea is to structure all of these things in a coherent manner that neither gives too much or too little, but that consistently exceeds your player’s expectations — teasers and sampler products.

Or, in short – Consumables, which have been shown to have a very high conversion rate across multiple game platforms.  Those, and vanity items – particularly in competitive, multi-player environments.

Long and this can go much longer.  It’s not my intention to tell you as a developer what to do – only to provide some food for thought on what you can do, how you might go about it, and from the perspective of having been a player, a gamer, a grognard — and a “Dungeon Master” since the first edition rule set of one of the games that pretty much set all of this into motion.

It might be said that as game developers, we always have the danger of falling into a rut where game mechanics are the most important part of the game.  They are important, but when it comes to selling our games, perhaps we need to be focused more on the entertainment side of the equation.   We need to entertain – make our players happy, but always wanting more and ever curious about what is going to happen next.


Project Manager at the Opera Mobile Store providing Sales-Marketing support. Content development and research.

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