How Video Game Economies are Designed

This video was originally a lecture I gave at a university in The Netherlands. Thanks to the students at Breda University of Applied Sciences for being the guinea pigs on this one! GMTK Patrons on the video tier can now access a recording of another lecture I gave, called "How to steal like a game designer". www.patreon.com/posts/gmtk-talk-how-to-65578597

The Bovine Defense Force Initiative isn't even the best part, the best part is from the Heart of Stone DLC. In Oxenfurt a tax collector stops you to question you about using all of the different exploits as well as stealing from peoples houses. He also prevents you from using banks until you pay your taxes.

My favorite gaming economy is the original Fable. “Good morning, trader. I see you have a hundred barrels of cider. That must mean they are cheap today.” “What ho, Hero, that’s right. Here you go, all of them sold at a bulk discount price.” “Thank you, kind trader. But now I see you have no cider, that’s no good is it? I have a hundred barrels I can sell you here, but since you are desperate, I’m sure you can understand I must sell at a premium.” “Tis fair, good Hero, I’ll buy them all at a premium!” “Good day, literally the same trader, I see you have many barrels of cider, I’m sure you must be willing to sell them at a discount…”

Zelda’s breakable weapons lead to a strange late game play style for me. I roamed the world killing lynels. My inventory was entirely my favorite lynel weapons and I got really good at shooting them with their own multi-arrow bows, right in the chin, stunning them, and killing them in one loop just to stockpile more of their stuff.

To be fair to the Witcher, it sounds like the problem isn't that the cows can be killed or that they respawn too fast, I'd wager that there's a fair few monsters that do the same, but that the cows don't fight back and thus can be slaughtered without consequence. If a player's willing to stay in one place and fight the same monsters for four hours, it's kind of on them if they break the game's economy, but being able to just generate infinite wealth by attacking peasants' livestock does sound like a pretty un-Witcherly thing to do.

That's an interesting topic. Take Skyrim for example: enemies usually drop everything they have equiped. That's realistic and rewarding, but it also necessarily means the amount of gold you will get for selling an item has to be much much lower than the amount of gold spent to buy that same item. Otherwise the player would be rich very very quickly

Time is a resource that is often overlooked. It's the primary currency in most free-to-play games (you can convert currency into a time bonus, however the game store presents it). It's also immediately apparent in a lot of competitive multiplayer games (something like the old 4 pool zergling rush in StarCraft was a direct gamble of potential resources for combat advantage).

I love the focus on other aspects of an economy often not considered, like exp and loot. I never though that exp and killing bosses are a form of economy. Another great video!

Can't express enough how well you distill hours of GDC talks and Gamasutra/GameDev articles into a cohesive video. You save us games enthusiasts (who mostly need to know crux of things) a lot of time. And it's an amazing skill to have IRL. Boiling down things to just essentials is one skill I really want.

The fundamental rule of economics is "people respond to incentives". It's not just supply and demand, it's about managing what players want and don't want.

Joking aside, CDPR finding that hole in the economy and plugging it with their own style of humour is just as effective as the comparisons you used after it. Really love things like that, especially because it was a few months later, so CDPR can say, "Right, people are stuck on farming cows and haven't found anything more broken, so we'll just fix that."

I feel like they could’ve added another patch to the Bovine Defence Force Initiative where if you farmed 6 of the cow monsters, an even higher level monster would show up

One way the Witcher could've solved the cow problem was to have armed guards come after you. or make you lose reputation to the people in the surrounding areas. In a way, that's adding a cost to a resource that's nominally free.

Was gonna start designing my game's trading system in 2 days , perfect timing Mark!

An interesting follow up would be on times economies in games collapsed, in the first Fable there was a well-known exploit to gain infinite currency by buying items in bulk, then immediately reselling them to the same shopkeep. The developers tried to implement supply and demand prices for items to encourage trading between the game’s towns, but because it recalculated cost at the end of every transaction it created instant profit for players.

There is another way to avoid exploit and streamline the economy: horizontal needs. You briefly mentioned it but it's worth digging the subject. In many games by progressing in later part of the game you start to need different kinds of materials to keep upgrading your character. For example in AC Valhalla to enhance a gear from Fine to Superior you need Carbon Ingots. Then to enhance it from Superior to Flawless you need Nickel Ingots, etc. This has 3 benefits: - It avoids endless grind: Once the players have enough Carbon Ingot to enhance their gears to Superior grinding more of them will not fasten their progression. So they are forced to go in later game region to keep progression. - This limit the impact of choices: you'll chose what to enhance first but then finding more ingots will allow you to enhance other gears - It's a great way to create catch-up loops: the leftovers ingots you have can be spend on newly found gears without slowing down your current progression. This means that you can try new stuff without having to worry too much about wasting important ressources. Of course creating meaningful choices is important, and fewer materials help for that. But sometimes you also want to guarantee a good flow of progression to any players and make sure they do not make mistakes that can slow down their progress or even block them totally.

It'd be cool to see you do a similar video on "MMO Economies" Because when other players are mixed into the economy it presents other interesting questions, and designing an economy with flaws becomes even more apparent when you're competing with other players in that market. Some of the issues I have often found, however, was also in trying to weigh the 'emotional value' of an item versus it's 'economic value' In Oldschool Runescape, you can buy and sell any item to any other player, though the re-introduction of the auction house makes this process exceedingly easy and impersonal. And it also comes with the caveat that every item becomes so easy to sell to other players that they lose the emotional value to them. You can buy an incredible staff within seconds using the Grand Exchange (auction house), use it until you don't need it anymore, and then auction it off to the next person, and it's just used as a step in your path rather than a personal item that has a story to it. And I don't attribute this problem simply to every item being tradable. While a game like WoW might escape the problem of making items only worth their economic value and not their emotional value, it does so by blocking the trade of certain items that are "soulbound." An item will become soulbound to a player once it's equipped, or Raid Items also cannot be traded outside of Raid Members. This creates another issue of making items not feel like your own property. Since you can't simply pass the item off to a friend, or trade it for big money, it doesn't feel like your item that you can do what you want with. It's bound to you and you alone, which also squanders a bit of the player to player economy. Going back to runescape, I believe there's a beauty to every item being tradable, and I do like how the Grand Exchange creates a sort of mini stock market for items, as their prices might inflate or deflate depending on current news about the game or a number of other factors. However, the ease at which you can just walk up to the grand exchange, look up this exceedingly rare item, and then purchase it there on the spot, that makes every item worth some sort of economic value and that's it, and you can almost certainly get your money back later if you resell it. It feels very impersonal and items don't have any sort of history behind them. And while the re-introduction of the grand exchange brought in a HUGE player base to Oldschool Runescape, it also removed this feeling of a market place where players interacted with each other, buying and selling goods. Even though there may have been a lot of scammers, that was almost part of the fun, because it meant you had to be a little smarter with your dealings. There's a lot more I could go into, and I already rambled on too much without making too many coherent points but oh well!

I feel like it doesn’t take long for me to end up with more money than I could hope to spend in most games, especially RPGs. Making the currency the thing you also need to level up helps with this, as it creates interesting choices about what to use it on. But it would also help if more games focused on balancing scarcity and higher cost of items. If I can afford to buy 90 super potions mid game then the tension during combat is largely gone.

Then you have games like Mount and Blade with actual working economies with interactable supply and demand built in. It’s surprisngly fun to be a merchant in that game, hope a mod comes along to expand on it

Thanks for the link to my "Keys to Economic Systems" article! Love the taps/drains analogies in the video, makes it definitely easier to grasp while discussing systems than sources/sinks/currency destruction. Keep up the good work!