Thoughts on the Economy (of RPGs)
A Feature by Mike Willis

Everyone loves money, right?  I mean, even those who claim that money is the root of all evil have a hard time explaining exactly how human interaction would work without some semblance of it.

How about in RPGs, though?  Is a monetary system necessary?  Well, strictly speaking, no.  But it may be interesting to investigate what money means to an RPG player, and what it should mean to an RPG author.  But first, note that I will be using the term RPG to mean classic, menu-based RPGs of the kind that the OHR was chiefly designed to support.  Some of the following discussion may be applicable to other types of games as well, but such considerations shall be bypassed completely.

In this article, first I will consider the purposes of money in an RPG, and the differences (or lack thereof) between money and experience points from the point of view of their purpose.  Then I will discuss implementation of some of the possible economic systems for an RPG and balancing them for the player.

POSSIBLE PURPOSES OF MONEY

In the real world, money is used to assign value to things on a single scale, but is also used to attempt to force all able individuals to contribute to society.  This is accomplished by having even the barest of necessities assigned a non-zero value.  The question then becomes, should these two things be mimicked in RPGs?

Having a global scale for assigning value to things is very helpful in an RPG.  Just as in real life, it simplifies things for the consumer immensely.  Comparing monetary costs is infinitely easier than trying to judge what makes a good deal in a bartering system.  But is this always what makes a game more enjoyable?  Of course, the answer is, "It depends."  There are plenty of ways to give players interesting choices using only a single monetary system of value, which we'll discuss later.  But don't forget that, in such a small economy as the player is going to be encountering, it can sometimes be more interesting to allow for some complications in terms of 'value'.  We'll look at some of the possible benefits of using bartering systems below as well.

What about forcing the player to 'contribute' to the RPG world?  This is a fairly intriguing question that rests on two points - how necessary is money to the player's survival, and how is money obtained?  Thinking about the first question, one might be surprised to discover just how necessary it is for the player to obtain money in a lot of commercial RPGs, if only because of the need for an Inn.  Throw in the usual need for medicinal items, and equipment, and the concept of a 'no-money-challenge-run' begins to look nearly impossible in many games.  However, this doesn't force the player to 'contribute' anything separate from his usual monster-bashing in a lot of cases, because money is obtained simply by killing things.

Now doubtless the beating down of random wild beasts is contributing to the local ecosystem, but there is potential here for some real interesting gameplay.  Imagine a game (or think of one; these ideas are not anything particularly new for RPGs) where money is awarded by NPCs for specific tasks.  This leads to a lot of balancing questions which we'll look into in a moment.

The final thing I wanted to mention while discussing the possible purposes of money was the difference between money and experience points.  Differences might seem obvious at first, but on closer inspection, these two concepts can potentially become difficult to distinguish between.  Both are typically rewarded to the player for various tasks (usually beating things up).  Both are used to make the player's future tasks easier.  Differences beyond that are almost purely psychological and/or by convention.  The main one is that money is usually shared by all the characters, while EXP is singular to each character.  But other differences are hazy at best.  Money is often seen as spent, while EXP is accumulated, but there is really no difference besides the player's choice as to when to spend the money (as opposed to being forced to 'spend' his EXP when the next level is reached).  The player often has more choices with how to use his money, but there are plenty of counter-examples where the player basically spends his EXP and chooses what stats to improve.

The differences melt away when one realizes that it would not be hard to destroy one of the two concepts completely and have the other accomplish all 'spending'.  It's easier to call this one thing money than EXP; imagine a game (or think of one; again, this is not necessarily new) where money buys everything - permanent stat boosts(level-ups), temporary stat boosts (equipment), consumable techniques (conventional items like Final Fantasy tonics), permanent techniques (spells); this kind of game could make money necessary indeed.  There's not necessarily any reason to want all of these things to depend on one 'spendable' concept, but it is helpful to think about what all is 'purchased' in an RPG.  Traditionally money and EXP are separate in that EXP is 'spent' on permanent things, and money is spent on temporaries and consumables.  But it might be interesting to think of ways to mix that up.

Another idea is to consider how the real world works.  Money is used to purchase physical things, but it can be a pain to get a job (and thus a means for making money) without experience.  What if NPCs in an RPG treated the player differently based on his EXP?  They might ask a seasoned traveler to deliver their important letter, but not entrust it to some dude who has just recently begun beating up on slimes in the backyard.

BALANCING THE VARIOUS SYSTEMS - COST EFFECTIVENESS

Now I've never studied theoretical economics, but its not hard to see that one fundamental postulate of any such system would be that if an individual can afford to buy everything he or she desires, then there is no such thing as economic value to this individual.  The concept of one thing costing more than another (whether monetarily or through barter) is meaningless if the buyer can afford both AND still afford whatever else he wants.  In an RPG, this can be okay, because there are plenty of other ways to give meaningful choices to a player.  But here we are talking about the economics, so let's pretend for a moment that we want economic value to mean something to the player.  How do we go about this?

Simply put, if money is going be meaningful to the player, he must NOT be able to afford EVERYTHING he wants.  One way of accomplishing this is making sure that the player's needs/wants are infinite - that is to say, there are (practically) infinitely many desired purchases for the player.  This is not as impossible as it might sound at first - consider any kind of ammunition, where a player needs to continuously restock (Inns also work like this in some sense).  Aside from that, it is also important to make sure that there is a wide variety of things to purchase that all have some use to the player.  Different equipment useful in various scenarios - 'relic' type shops really help in this department.  A variety of usable items is also nice.  But don't forget that in the real world, money is used for services as well as goods.  The Inn is the main service in most RPGs, but there could be plenty more.  A hospital to take care of the sick (status afflictions), a wise man with important knowledge, a training ground to increase stats, or a smithy to refurbish old equipment - there are so many possibilities.

However, a variety of things to purchase is not necessary, and may not be desirable for some games.  The single most important thing to keep track of is the player's purchasing power.  In games using a single, global currency this is easy to examine, but still a challenge to balance.  If the player is acquiring money from battles, and has easy access to many battles, it is important to make sure that his desired purchases are EXPENSIVE, if he is to have any meaningful choices to make at the shop.  In games using some kind of bartering system, or awarding money for tasks rather than battles, it may be easier to control how much purchasing power the player has at any given point, allowing costs to be more easily balanced.

One important thing to note is differentiating between what the player needs and wants.  If the player needs a good or service (such as an Inn), the cost MUST be low and easily acquirable.  This is easy in a monetary system, but potentially a challenge in a bartering system.  One way to bypass this is to make the absolutely needed services free - healing points, or even healing after every battle works for some RPGs.

When assigning costs to the player's wants, the issue is one of cost effectiveness.  Does it make sense to purchase given the cost?  Just as in all other aspects of game design, play testing is key.  Experience can also help to guide costs; think of things in other RPGs that were for sale that you never purchased.  Why?  Would you have purchased it if it had cost less?  Were there things you still would have purchased if they had cost more?  If an item has the same effect as a spell (like an antidote, say), how cheap does it have to be to make it worth saving the cost of the spell (this implies the need for MP balance as well, and the real possibility of running out of MP)?  Does being far from an Inn (that would have restored the MP at a cheap cost) really demand careful use of resources?  If a store sells two weapons, how much cheaper does the weaker one have to be to make it a worthwhile investment, if the other is better in every aspect?  The possibilities can be more complicated in a system with bartering.  Maybe the weaker weapon can be traded for relatively common furs (a lot of them to balance against the few furs needed for the Inn), but the stronger weapon demands some foreign pepper (not much, but enough to force the player to go to another country).  This may make the weaker weapon a worthwhile purchase to help reach the pepper.

FINAL THOUGHTS

As can be seen, there are lots of things to consider with the money in an RPG.  As with all aspects of game design, balance is key.  All the theoretical discussion in the world cannot make up for the simple fact that play testing is the only sure way to achieve balance.  So when working on a game, be sure to think about the purpose and balance of your economic system and make this a part of your play testing.