Role-playing games (RPGs) recreate a subset of society. Do you know which subset is present in most RPGs? Economy. It's called Game Economy.
Turns out we can learn a lesson or two from exploring how economies are designed in games. It's a study on how to manage and allocate resources, such that all players are interested in keep playing "the game".
Both in games and personal life.
Not too hard, not too easy
A balanced economy is designed to make the game "fair" for all players.
A game economy is the system governing how resources (like currency, items, or experience points) are earned, distributed, and consumed within a game.
It’s the backbone for a sense of progression, challenge, and balance. It's no different from real economy:
- Currency: money
- Items: goods, properties, and assets
- Experience points: skills
As the players progress in the game they earn currencies in multiple ways (defined as "taps"): quests, harvesting, chests, increase level.
Players use the currencies to buy upgrades and items that allow to further progress in the game (defined as "sinks").
The balance of taps and sinks create the value of the game economy:
- If a game has too many taps and few/unworthy sinks, resources overflow (inflation), the value of currencies diminishes and the player loses interest in keep playing (too easy)
- If taps are insufficient (deflation), currencies become too valuable and not worth spending, there is no progress and the player loses interest in playing the game (too hard)
This is exactly the same in real economies. Not just that, it's the same also in your own personal-life economy:
- Too easy: boring activities, devoid of meaning, worthless reward
- Too hard: sense of being trapped, unfair system, hoarding of currency
Seeking a (fair) balance
Pinch points are situations when an item becomes highly desirable, but the player has not enough currencies (yet). At this point the player interests is at the highest. Players have two options:
- Keep playing the game even more to collect resources from taps (time investment)
- Spend hard currencies to progress faster (real-money investment)
That's the sweet spot: you want something, and you have the means to obtain it.
Investments (time)
All calculations revolve around the one shared universal currency: time.
The availability and the cost of any resource in games should be aligned with its value in terms of time. You determine the time it takes a player to achieve a goal, and from it you create a schedule. The schedule forecasts the player progress, and the most adequate price of resources at different points in time.
Same in your personal life: currency (money), items (goods), and experience (skills) are all time investments.
Making an investment means paying with time:
- Skills increase your value, which correlates with more potential to earn money, which can be used to obtain goods
- Goods have a monetary value and can be sold to reverse the process, getting money and using them to acquire new skills
Levers are resources that start as sinks but then become taps in the long-term. It's the real world equivalent of an investment.
Example: a new character that starts at level 1. Initially you are required to spend resources to level him up, since he is too weak compared to your main team and enemies.
Once the character reaches a high enough level, he becomes the main driver to earn even more resources.
The good news is that humans are born with a "large" supply of the main currency: time. The bad news is that everyone starts at level 1: no skills, no resources.
Deficit and surplus
Players should experience a rollercoaster of emotions (deficit and surplus).
The challenge of certain quests (low resource or strong enemies) should turn in the satisfaction of the next moment, when the player earns the rewards.
Balance interest over time. Players should not get frustrated several times in a row (high risk of dropping out).
In the beginning players are wary, they are deciding if the game is worth the (time) investment. Therefore, initially you should be giving out content more generously.
Indeed, children have fewer restrictions and obligations. That's by design, they are learning how to play the game.
The initial objective is for the player to learn to appreciate the game’s resources and experience, as fast as possible. As players invest more and more time in the game, the sunk cost fallacy makes less likely for the players to leave.
Sunk cost fallacy: Players continue investing in an endeavor because they’ve already committed resources (even if the endeavor is failing or has lost the initial interest).
Therefore, resources later in the game become harder to obtain (more time required). As such, these same resource are perceived as more valuable, leading to a more intense spark of interest and satisfaction when obtained.
Most game economies are set up to be exponential curves.
The game gets harder, but your investments equip you with more skills to face stronger monsters.
Time doesn’t wait
Resources that affect the player's progress in the game must be limited and expressed in terms of time (investment resources). All of these items affect the gameplay balance (taps and sinks).
Some resources instead don’t affect the player's progress in the game (e.g. cosmetics items). These resources are easier to balance because they don’t impact the ability of the player to hoard more currencies (non-investment resources).
And that's where we meet the key difference with real life: time doesn’t wait.
In games the monsters become stronger gradually as you learn more skills and increase your level. In life the monsters become stronger with time, and time doesn’t stop and doesn’t wait for your skills.
If you focus on non-investment resources (cosmetics) you are spending time in resources that don’t increase your level. But the challenges, monster, and quests are becoming harder anyway, regardless of your investment.
You want for challenges to become harder. The alternative is loss of meaning, boredom, repetitiveness. It's not fun to play always the same game after it becomes easy.
The key is to balance it all with investment resources. Those are the tokens that makes your progress, increase your level, makes you acquire new skills. The game gets harder, but you are prepared to face it.
You should aim for a pinch point: constantly playing for a valuable resource or skill that is not yet within your reach, but that you have the means to acquire with effort.