Video game mechanics often have double identities, understood through one lens by the player but in an entirely different way by the designer. Currency mechanics are like that; we can spend hours selling loot and buying tools without understanding the economics the developers do. But if we want to know more about reward systems, especially those in vast multiplayer worlds, we need to understand their means of exchange; we have to study how currencies act as connecting rods between players, environments, and items.
This article will focus primarily on monetary systems in MMOs as that genre contains some of the most fleshed-out economies you can find in games. However, if you want to know about currency in general, don't fret. You'll be able to apply the concepts here to games at large. Let's get the boring housekeeping out of the way first. There's no one definition of currency, but what I'm talking about when I use the word is:
Any numerically-represented resource which exists primarily as a store of value and that players can trade for goods, services, or other currencies from players or NPCs.
From a distance, the purpose of tradeable tokens in play may look like an open and shut case. Everyone knows currency exists for you to swap it for rewards, and no one is wrong about that, but this is only one of its roles. Money isn't just something we spend, it's also something we collect, and the above explanation of currency's purpose doesn't address its nature as a reward. A more holistic conception of currency starts with this basic economic maxim: If a person can trade Item A for Item B, then both those commodities have the same value; they are worth as much as each other. By extension, if you can trade Item B for an Item C, then not only do Item A and B have identical value, we can infer A and C do as well.
It goes down smoother with a concrete example: Let's imagine we're playing a beach-themed MMO in which Sand Dollars are the standard unit of currency. In this RPG, we can trade one Sand Dollar for one Mai Tai; this transaction implies both the Sand Dollar and the Mai Tai are worth the same amount. If the Sand Dollar were worth more than the Mai Tai, the other party would have to trade us more than a Mai Tai to get our Sand Dollar. If the Mai Tai were worth more than the Sand Dollar, we'd have to hand over a Sand Dollar and something else to make up the value.
After trading our Sand Dollar for a Mai Tai, we take our cocktail and exchange it for a Pair of Sunglasses. If the Sand Dollar equals the value of the Mai Tai and the Mai Tai equals the value of the Sunglasses, then the Sand Dollar also equals the value of the Sunglasses. But so what? What does this tell us about game design that we don't already know? Well, an interesting thing happens when we apply this transitive property to currency and include its points of origin.
In an RPG, the most common sources of currency are selling items, looting enemies or objects, and completing quests. In gaming, we tend to use the term "trade" to describe swapping items with a player, but there's no reason that trading can't also mean switching money or even work for something. Using our understanding of tradeable commodities having equivalent value, we can say that when a game rewards us an amount of money for our work, it's saying that salary is of equal value to the work we've done. Imagine in our beach MMO that we kill three Fiddler Crabs, and from them, we loot enough money to make one Sand Dollar. In this economy, killing three Fiddler Crabs is worth a Sand Dollar, and if we know that we can swap a Sand Dollar for a Mai Tai, then the designer has judged it that one Mai Tai is an appropriate reward for killing three Fiddler Crabs.
From this example, we can observe that currency is a way of taking our work in a game, which is abstract and intangible, and tying it to something physical and quantifiable. That form makes it possible to trade; a designer can go from the wishy-washy opinion that vanquishing that boss is worth quite a bit of reward to putting a hard number on it. Give us shops full of items with equivalent value numbers, and currency becomes a mediator between labour and commodity. Or, to simplify it, it can be a way of turning Crab murder into Mai Tais.
We have found a niche filled by monetary trade systems but must now ask a new question. There is an array of converters to transform work into reward, many of them faster than pressing some coins into players' palms and sending them off to the market. Games can immediately furnish us with items by dropping them from enemies or having quest givers hand them to us. But when they have us obtain item rewards via currency, we have to collect our medium of exchange, then usually have to travel to a market, and afterwards, trade our currency for items. Market economics adds extra steps to a loop that a designer could close more efficiently.
If there is an explanation for why designers implement currency, it must rest on its advantages over more direct delivery methods for items. We have to ask, what can shopping with coins or credits do that quest rewards, loot drops, or trades can't? The most straightforward defence is that currency lets us choose our reward. Instead of having to accept whatever items we find in a chest or that we can lift from a mob's corpse, we can have our pick of the stall. But MMOs offer a host of situations where we get to select what rewards we receive with no currency involved:
- Quests can end with us picking an item from a selection.
- At the end of a raid, we can collectively decide which gear to distribute to whom.
- In any trade, we can choose which goods we swap with other players.
The capacity to pick our reward isn't an exclusive benefit of currency. However, we can see that introducing currency to the above instances increases players' say over what items they end up holding when the dust has cleared. We all love a good quest reward, but designers making quests the primary method of winning goodies would tie the player down. Even if they let us repeat any quest, we'd still have to return to the same people and places and complete identical tasks every time we wanted a particular reward. Imagine if whenever we needed a mana potion, we had to haul ourselves back to the same priest and go fetch seven goblin lamps. We might also waste time hunting for NPCs whose quests dispense the exact items we want or take copious notes just to know where our human vending machines are. Almost every designer wants to give their player varied experiences without laborious busywork and primarily dispatching rewards from quests scuppers that goal.
Without currency, the designer would also come unstuck when they want us to pick multiple quest rewards of competing values. Suppose that Sunglasses, a Mai Tai, a Parasol, and Swimming Trunks are all worth the same, and at the end of a particular quest, we get to walk away with one. There's no issue there. There's not even an issue if the game allows us to select two treats from the list.
But let's say the designer introduces a fifth item double the others' value: the Surfboard. Even if they believe that we are at the ideal progression rung to use the Surfboard, they cannot include it as a reward we may receive from this quest. As it is the most valuable item in the set, the player would likely always choose it as their quest reward. Even if we don't want the Surfboard, if the game has a player trade system, the optimum strategy is to select it so that we can trade it to another player for two of the other items we do want.
It is possible to retain quest rewards as the primary method of assigning items by fixing these issues. If designers don't want us to have to return to one NPC every time we need a certain good, they can allow us to claim it from various NPCs we can find in any region at any point after we've completed the quest. If they're worried about the player performing the same tasks every time they want to claim an item, they can implement a range of activities that let the user earn the items.
And about that Surfboard quest: The designer could decide that when it comes time for the player to collect their prize, they can pick the Surfboard and one other item from the screen. Alternatively, they could choose the Surfboard or any three of the other items. Either way, the handful of trinkets they'll receive will all be of the same value. So, now the player can retrieve their reward from multiple individuals in many different locations at a time that suits them. They can obtain that capacity for reward by completing a variety of different tasks, and they may effectively spend points at one of these quest givers to pick from a variety of items that add up to the same value. We have now invented currency.
Notice that as we introduced each characteristic of the currency system, the variety in rewards and activities, and the flexibility afforded to the player, increased. You can see how the same becomes true when designers allow players to loot currency. Say that they let us increase our Strength stat with an item: Shrimp. Shrimp drops randomly and rarely from rock pools. To win it, we'd have to keep grinding the same resource caches until we're bored to tears. The developer could add the Shrimp to the loot tables of more items and enemies to liven up the play, but this could easily make loot tables cluttered. Additionally, when a game rewards more items per object or monster, common items can become rare as others freeze them out, or they may overwhelm us with an avalanche of drops every time we loot, bogging us down in inventory management.
However, imagine the developer makes those rock pools or those monsters drop money. We can now spend our time performing diverse tasks and still pocket the items we want at the end without being overburdened. This is because money is generally available from most monsters in an MMO and doesn't usually require inventory space to store. Currency can be of particular help when more than one person in a party is craving the same drop. Instead of friends quickly turning to enemies as they argue over who gets that rare Jet Ski, they can all receive enough money to buy the Jet Ski. Maybe not all at once, but all eventually.
This brings us to another important point: currency effectively allows rewards to be broken down into smaller parts. Fragmenting rewards can help slowly advance the player towards items they want to acquire. Let's imagine ourselves as the developer and set a hypothetical design goal: We have a boss, a Sperm Whale, and we want the player to win a mount: a Jet Ski, after killing it about five times. We can't give the player a fifth of a Jet Ski; that doesn't make sense. So, we need another solution. It's common for novice creators to believe they can reach a goal like this by setting a drop rate. In our case, we want the player to get the Jet Ski after roughly five victories, so it seems intuitive to tune the drop rate for the item to 20%. Sadly, this solution can antagonise players on the statistical fringes or leave them much more or less capable than we want them to be in future areas.
A one in five chance of success does not mean that the player will achieve a positive result on every fifth attempt. Instead, the chance of success remains constant regardless of how many tries they've made. It would not be shocking for a player to defeat the Whale and get the Jet Ski on their first attempt, nor would it be some extreme outlier if they made ten attempts and still did not see their new mount. Additionally, a player putting their faith in RNG won't see any progress towards their goal. While they may be spurred on by the possibility that their next boss battle will be the one that nets them the Jet Ski, it can be deflating if you've not gotten it seven times in a row, and you know you're no closer to getting it on your eighth try than you were on the first.
However, awarding currency for the battle and then letting the player buy the Jet Ski is a superior alternative. Let's say the Whale drops 20 to 40 Sand Dollars per victory, with the player having an equal chance of getting each amount between those two figures, and that the Jet Ski costs 150 Sand Dollars. On average, players will earn 30 SD per Whalle slay and have a general idea of how close they are to the Jet Ski based on their bank balance. The luckiest player will only win the mount in a minimum of four battles (4 x 40 SD = 160 SD). And a player that falls through the cracks can still hit that target within eight victories (8 x 20 = 160 SD). Having a ballpark figure for when the player will get a reward benefits the audience, and it can help the designer plan what comes next for them. Know what resources the player has on hand, and you have a better idea of what challenges would be appropriate for the immediate future.
I'm sure you've noticed that most players under this system will also have a little change left over after buying their Jet Ski. In fact, it's exceedingly unlikely any MMO participant will finish a quest, hunt, or raid with exactly the amount of money they need to buy the items they want. Embedded in that excess, we find another advantage of currency over direct reward. If you are only assigning players level-appropriate items for their work in an area, there will be a limit for the meaningful conquests they can make in that zone. Once they've got the best equipment and abilities for their level, anything else they collect is dead weight. They could potentially trade those junk items away, but bartering isn't everyone's cup of tea, and trading systems can be a minefield.
The player's potential to bloat their inventory like this is problematic because they may reside in an area longer than is strategic. Maybe they have finished their quest for their final piece of Level 15 gear, but they still have to kill a path back to Beach Hut. Maybe they're helping boost a friend up to the next level before moving to the next region. However, if you introduce currency as a reward, the player can step a little over that line and still receive useful resources. If they have their Level 15 loadout or the money to buy it, and they get a cash bonus, it's no skin off anyone's nose. Money is money and can be converted into practical items wherever you are. Currency is also a resolution for the opposite issue. The player may not want some of the gear you're trying to foist onto them at the top end of one level or may prefer to trade some power now for some power later. With a currency system, they have the option to save up their reward.
And think about what this does for player trading. Let's say that I have a pair of Sunglasses that I want to trade to a friend for a Mai Tai. Both items involved in the trade are the same value, so it is a fair trade, but that doesn't mean it will go ahead. Maybe no one I know has a Mai Tai, and maybe when I find someone who does, they don't want a Pair of Sunglasses; they're after some Swim Trunks. My friend may wish to keep their Mai Tai, or perhaps by the time I find someone I can shake hands with on this deal, the Mai Tai's value has increased to 1.5 Sunglasses. I can't trade someone half an item.
With a currency in place, all of these headaches disappear. If my friend doesn't have a Mai Tai, I can simply trade them my Sunglasses for a Sand Dollar and then use that Sand Dollar to buy a Mai Tai from someone else. It doesn't matter if the next person wants Trunks or Sunglasses, I can trade them a Sand Dollar for their Mai Tai, and then they can use that Sand Dollar to buy whatever like they. They're never going to want to keep the Sand Dollar for practical reasons because the only application of money is to give it away; currency is the one asset that exists to be got rid of. If the Mai Tai's price rises 50%, I can just pay one Sand Dollar and 50 Sand Cents instead of worrying about where to find half of a Pair of Sunglasses. And when trade is made easier, goods flow freely, making for a healthier economy.
We explored how currency makes labour tangible and mediates between work and reward. We can now also see that money is a device for physically representing the abstract concept of value and how it allows any good or labour to be exchanged for any other good or labour. The benefits go on: playing the economy is a new skill you can introduce to your game that holds appeal for pragmatic players with a head for numbers. Designing a functioning economy is also often a cornerstone of worldbuilding; the player is unlikely to feel as though they're really in a galaxy of space pirates or a kingdom full of travelling merchants if they never get to buy and sell items. This act of buying and selling is also a form of roleplay that can make them feel like they're a space pirate or a travelling merchant.
I hasten to add that despite currency systems being an economic godsend on so many levels, that doesn't mean that they are the right fit for every reward. I'll talk about this in more detail in a future article, but for now, remember that constantly badgering your player with financial management can fatigue them. Additionally, just because you don't officially decree a currency system doesn't mean you won't end up with one. If you have a massively multiplayer environment in which trade is possible, players will likely try to establish a currency. That currency system may be rougher than one you've expressly designed. The community can't program the game, so they're unable to ensure the economy is fair or that exchange is convenient.
Before Habbo Hotel had officially-sanctioned markets, players would use Green Sofas and Rubber Ducks as currency and stored their wealth in Record Players. Record Players were rare, making them valuable, and limited edition, preventing their value from falling through more Record Players being introduced to the market. Think of it as the decorating equivalent of keeping your money in gold. Then, one day, the developer issued a new heap of Record Players, and their worth crashed, wiping out the fortunes of more than a few virtual citizens.
Lastly, just because currency systems can provide fairness and empowerment in video games doesn't necessarily mean they can do the same in the real world. Remember, games are relatively closed systems that developers have strict control over, and they generally manipulate those systems for the player's benefit. Our economies are not engineered for our pleasure, and even game studios can get currency wrong. Sometimes, economic forces from the outside world can also undercut virtual monetary systems. E.g. Developers might deflate a virtual currency, making it a slog to buy items, hoping that players will use real money to purchase the same rewards.
Having said all that, currency can be a fantastic steering wheel for a player to manoeuvre through the slalom that is a reward system. Currencies are not the only way to give players control over their rewards, but they are a familiar resource that allows the player to freely exchange work for items and items for other items, regardless of what they're trading. They introduce new exploration, roleplaying, and challenges to a title, and provide plenty of flexibility in what, where, and how rewards are claimed. Thanks for reading.
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