Game Design Theory Level 4 – Advanced Game Mechanics and HUD / GUI Elements

In-Game Economic Structures

Ideas for In-Game Economy Structures

Video games are structures within structures within more structures. The bigger and more complex a game, the more structures it will have and support. As an example of an isolated structure that affects the overall structure of a game, let’s look at in-game economies in video games.


Virtual Currency


virtual currency


There are many types of in-game economies with different purposes. Most common is the concept of virtual currency. Virtual currency systems, at their most basic, are structures within the game that allow the player(s) a way of trading gameplay rewards for in-game customization. Virtual currency systems also give the designer a way to control player improvement while teasing greater power to come. For example, a fantasy RPG may have the option to visit shops and purchase items. The gold to purchase these items comes from defeating monsters in the world (Objective=take gold from monsters; Conflict=monster’s fight to keep it; Outcome=defeat monsters, get gold). Once the player has the gold, shops offer ways to spend that gold on better equipment that, in turn, allow the player to fight bigger monsters for bigger gold rewards. Clever design will also have items that offer great advantages (a flame sword perhaps) but is also out of the affordable range of the player when they see the option to buy it for the first time. The player should also be introduced to an enemy that could be defeated with this legendary sword around the same time. Now the player is even more motivated to return to gameplay to fight more monsters and eventually earn the gold to buy the flaming sword.


Eve Online is an excellent example of another type of in-game economy that uses virtual currency.  Eve’s in-game economy is complex and vast and functions in many ways how real world economies behave. Players can collect materials in the game world, manufacture items with that material, and then bring those items to an in-game market that all players have access to. This system is so detailed that players can actually play exclusively as manufacturers and merchants, and do nothing else if they wish.




Micro-transaction economies are a little different. Typically, games with micro-transactions use them as a for profit pay model for the game. These games offer most or all of the game’s content for free, but also offer the player(s) an opportunity to spend virtual currency (this time bought with real money) on upgrades and advantages in the game. For example, instead of exploring ten dungeons to accumulate the coins to purchase that flaming sword, the player simply paid five dollars in real cash (which he has because the game was free) to get the sword immediately. This kind of structure, however, can create many problems in design. By its very design, players with more money can instantly have an advantage over players with less money. If the game is multiplayer or an MMO, this can create balance issues that cause frustration and boredom at the same time; making the game for players with the flaming sword too easy and too hard for those without it.


Valve’s Team Fortress 2 offers a compromise on micro-transaction purchases. Players are not able to purchase items that give a them an in-game advantage over other players. Instead, they can purchase special hats or rare weapons designs that customize a player character’s look and style but not their effectiveness in the game. This has proven to be an incredibly successful pay model for Valve and very popular among Team Fortress 2 fans.


Auction Houses


Auction Houses are a sort compromise between strictly in-game economies and micro-economies. They allow an in-game market where supply and demand for purchasable items are determined by the players themselves. All items sold at the auction house come from achieving objectives in the game just like normal. However, players are then free to sell their spoils to other players at a price they determine themselves through open auction. This model actually creates new motivations for players. Perhaps a player has completed the game and now finds fun being a merchant of sorts to new players. This model also creates new, unexpected content, as players send other players on quests to bring items to the auction house.

Blizzard’s World of Warcraft has an in-game auction house with thousands of items. Each item was created or acquired within the game by a player and then brought to the auction house to sell to another player. In this case, no hard is allowed, only soft cash found while playing the game is accepted. This system also rewards those who play the game for long hours over those with extra real world cash to spend.


Game Economies as Virtual Models


Perhaps most fascinating is that in-game economies are actually virtual models of how real-world economies work. Bad in-game economies can destroy the intended markets just like good structures can make markets flourish. Each game with a virtual currency is a mini social experiment with economies that any market economists would be fascinated by. They, in fact, teach us how markets work and react with specific decisions and structures.