Just like reality, games need an internal mechanism for the distribution of resources during gameplay.
This system is known as the video game economy.
The in-game economy creates balance within the game by enabling the player to earn and spend resources as part of the game’s progression.
A game economy design will differ from one game to another, but the core principle remains the same: it encourages users to play more by earning resources (like energy, gems, and in-game currency) and incurring losses, creating a loop of endless gameplay.
In the long run, this helps the gaming studio earn while encouraging players to keep playing.
How Does It Work?
Let’s use a farming game as an example. A player plants free seeds and after waiting a few minutes, the crops are ready to harvest. Once the crops are harvested, you “sell” them to customers or trade them with other players for other assets.
This action gives you access to more resources, like animals, additional farmland, buildings, etc., which will help you progress in the game. The currency or resources help you win levels faster and dictate your position in the game.
This in-game currency may or may not be connected to real-world money. But before a game can design an effective and well-structured economy, it has to define its currency.
How To Create a Well-Structured Economy
In order to create a game economy that’s functional and fun for the player, some things need to be established or defined.
Determining In-Game Resources/Currency
Using the same farm game as an example, games, seeds, animals, and buildings are assets. They indicate the player’s progression. On the other hand, the “coins” earned from completing tasks are a currency. They can be used for in-game purchases—like more seeds, animals, and buildings—or even for boosters.
In other games, your life or energy is used as “currency.” Anything that depletes quickly and dictates the game’s progression is the currency of the game.
Soft and Hard Currency
Soft currency can be found in games that are free to play. For example, players win a particular currency after they complete a goal or level. They use this to buy other resources, lives, or assets. In other words, they don’t require players to use real-world money.
Hard currency is more difficult to win, motivating players to spend more time in the game. Think of it as “diamonds” found in farming games. They’re rare, so to acquire them, a player would need to spend real-world money.
That said, some games will give you a small amount of hard currency to begin with. This will help familiarize players with the game’s mechanics, help them understand the benefits (like skipping wait times or levels), and entice them to buy them with real-world money.
Hard currency is usually available through in-app purchases.
Creating a Cost System
Players need to enjoy the game. To optimize this, a game designer would need to fix assets and other purchases at fair prices. Simply put, it is the process of determining how much everything costs.
For example, a farmer wins 100 coins after harvesting carrots. But would they receive 100 coins every time they harvest carrots? What makes them earn money? Those are some questions that help structure the point or cost system.
Understanding Sources and Sinks
Sources refer to currency earned after completing levels and other player rewards.
Meanwhile, sinks are moves implemented in gameplay to use up resources. For example, buying extra lives or boosters.
A well-structured game will have proportional opportunities to gain sources and sinks so that the game progresses and doesn’t end abruptly.
Defining the Progression
As established, the game’s currency can determine the player’s progression.
Depending on how the currency is designed to be earned, a game’s currency will either encourage a player to progress or simply quit the game. So, determining the correct way to use the currency is essential.
A game can have a perfect economy, but if it isn’t very interesting or fun, players will not play the game or buy resources. On the other hand, a video game can have an attractive design, but if the levels are too easy and there are no in-app purchases, they may not be motivated to play enough.
Similarly, if the game is too challenging and has no reward system, the player will give up playing.
Hence, it’s absolutely necessary to define the progression of the game. Most gaming studios incorporate primary and secondary goals. For example, after level 20 of playing the farming game, players gain access to a certain portion of the farm, get to mine gold, etc.
Balancing Deficit and Surplus
Just as progression is important to keep things interesting, balancing deficit and surplus is also vital. As levels progress and the surplus increases, the prices of resources and other in-game purchases should increase.
At the same time, the number of rewards decreases, creating a deficit and making the gameplay more challenging.
If a level gets too difficult, a player can use a booster with the surplus to pass the level. This obviously calls for meticulous planning, so balancing deficit and surplus becomes an entertaining challenge.
Video Game Economy: The Witcher
Defining Player Motivation
Not every player engages in games for the same reasons. Some may be looking for an immersive experience while others may be motivated by social connections. Similarly, some may want exclusive wins while others are highly competitive.
Understanding the game’s players and their motivations can help designers achieve the right economy while defining sources and sinks better. It helps create a cohesive economy that encourages players to continue playing.
Considering Player Behavior
Many casual players want to kill time and may not be actively seeking validation or rewards. Such players may not be too excited about spending their currencies on resources or boosters, thus ending the progression of the game.
On the other hand, there are those who heavily engage in games. They tend to play continuously and go through many levels at a time. To ensure players aren’t passing levels effortlessly and ending the game too soon, gaming studios can create hurdles, such as a time frame block, limited lives, or periodic rewards.
Test Before Anything Else
Building a game economy calls for many iterations—that’s a given. However, it’s essential to test the game economy. All your efforts will be in vain if the player does not behave as predicted.
Some of the factors to pay attention to when designing a game economy are:
- Initial currency (how much currency a player will start with)
- Periodic rewards
- Rest time (lives and energy)
- Costs of lives or energy
- Cost of progression
- Rewards and how they will be distributed
Testing your game economy allows you to troubleshoot how it works while ensuring that it is playable, fun, and easy to grasp for the gamer.
Designing the Perfect Game Economy
A well-designed economy makes for a fun game. It can help game titles rocket to success and become popular. Albion Online, RuneScape, EVE Online, and Guild Wars 2 are only a few examples of beloved games that continue to be relevant thanks to their in-game mechanics.
If you’re wondering how to create the perfect game economy, here are 5 tips that can help.
Start With a Positive Balance
No game should start with zero currency. It would be too discouraging and won’t leave the player with the opportunity to progress.
As a bonus or gift for playing, reward your players with a somewhat hefty currency at the start. This practice will draw in “collection-hungry” users as it nudges them to play and spend resources to advance.
If a game starts with an in-app purchase at the very beginning, players might not be motivated enough to want to continue playing. It’s essential to slowly, gently, and subtly introduce monetization opportunities.
When the gamer is completely immersed in the games and has shown interest in completing levels, you can introduce in-app purchases. Once they’ve taken the game for a spin and become more invested, they’re more likely to make a purchase.
Let Them Access More Than One Source and Currency
A game cannot have just one currency; it won’t be enough to motivate players. In fact, no player would want to shell out money every time. Instead, implement more than one way to earn resources.
For example, if a game has limited lives, a player can watch a 30-second to 1-minute ad to win additional lives instead of making a purchase. This will keep players motivated to continue playing and keep them on your app for longer.
Ads aren’t the only way to monetize games. Other options include in-game achievements and user actions. Striking a balance between soft and hard currency can make the gameplay interesting and keep the players enticed for longer.
Focus on Player Earnings
Who doesn’t love to be at the top of the leaderboard? Allowing players to win more resources keeps them hooked. The more options users have to win rewards and gain recognition, the more likely they are to play.
However, striking a balance is just as important. Players will get bored quickly if they get all the currency they want so set a limit and match the progression with the reward.
Make the Game Store Welcoming
Players need to be intrigued by what the game has to offer, so make the store welcoming. If done right, a player will repeatedly visit the in-game store to purchase assets with their in-game currency to enhance the experience.
One way to do that is by building curiosity. For example, certain items from the store are only available after a certain level, or certain items are only offered after a particular purchase has been made.
Ensure everything is not always available as it will discourage players from buying things. The store and its items may lose their novelty.
The Don’ts of Gaming Economy
Just as there are best practices to follow in building a game economy, there are also a few things that you should stay away from.
Don’t Focus on the Sale
While having monetization options is important, don’t focus on the “sell” aspect of a game. Let the player build a base and earn enough currency in the game itself. Allow them to get hooked before introducing purchases.
Once players are loyal, it’s time to introduce in-game purchases and ads to drive monetization and increase sales.
Avoid Offering Unlimited Rewards
A game cannot keep giving rewards without taking anything. That will bore the players and affect the economy. Consider a “limited time” offer to keep players wanting more.
These goods or resources must have value or expiration over time, driving the players to purchase them via game currency, ads, or real money.
Don’t Focus Exclusively on Paying Players
Not all players who are interested in the game will be keen on spending. Always assume that approximately 95% of players are non-paying players.
In light of this principle, a game needs to find ways to award money even without in-app purchases, like in-game ads and game achievements. Consider smartly placed ads and offers to entice players.
Since some gamers may not know anything about in-app purchases, it’s essential to have these pop-ups placed organically so they don’t annoy users.
In many ways, the game economy is a lot like our economy in the real world. Although less complex, it follows the same principles. This involves the relationship between production, resource management, and the player’s money.
In some games, virtual currencies can be bought through real-life money and can impact a player’s progression in a game. In others, players have to interact with gaming elements and accomplish certain tasks before moving forward.
As a result, having free and unlimited resources isn’t ideal. Players must receive validation only after exerting some effort. A well-structured game economy pushes players to continue playing while subtly encouraging them to make payments through soft or hard currency.
A game economy designer will define the resources or currency, structure a cost system, define the game and player’s progression, balance deficit, and surplus, define player motivation, learn players’ behaviors, and vigorously test and implement iterations.
We hope this article has helped you understand what a game economy is, how to create one, and the basic dos and don’ts to follow.