Economy & Resources
An economy is any system where resources flow - created, spent, exchanged, lost. Most videogames have economies, even if they don't look like money. Understanding economy design is understanding how value moves through your videogame.
Resources
A resource is anything the player has, wants, or manages:
| Type | Examples |
|---|---|
| Currencies | Gold, coins, credits, gems |
| Consumables | Health potions, ammo, food |
| Durables | Weapons, armor, tools |
| Stats | Health, mana, stamina, experience |
| Time | Real time, in-game time, cooldowns |
| Attention | What the player can track and manage |
| Space | Inventory slots, building area |
| Information | Map knowledge, enemy patterns |
If the player cares about having more or less of it, it's a resource.
The Four Flows
Resources do four things:
Sources - Where resources come from. Faucets.
- Enemy drops
- Mission rewards
- Time-based generation
- Purchase/crafting
Sinks - Where resources go. Drains.
- Spending on items
- Consumable use
- Decay/maintenance costs
- Death penalties
Converters - One resource becomes another.
- Crafting (materials → items)
- Training (gold → stats)
- Trading (one currency → another)
Storage - Where resources wait.
- Inventory
- Banks
- Stockpiles
Healthy economies have balanced flows - sources and sinks in rough equilibrium over time.
Economic Health
Inflation: Too many sources, too few sinks. Resources pile up. Value collapses. Nothing feels precious.
Signs: Players have more gold than they can spend. Shops become irrelevant.
Deflation: Too many sinks, too few sources. Resources are scarce. Progress stalls. Players feel punished.
Signs: Players can never afford anything. Hoarding becomes mandatory.
Dead Currencies: A resource with no meaningful use. Takes up space, adds no decisions.
Signs: You collect something but never spend it. "What is this even for?"
Optimal Path: One strategy dominates. Choice becomes illusion.
Signs: Players always buy the same thing. Other options are "traps."
Designing Economies
Start with Verbs: What do you want players to do? The economy should reward those actions.
Create Decisions: Resources should force interesting choices. "Save or spend?" "This upgrade or that?"
Tie to Progression: Resource flow should track player progress. Early scarcity, late abundance (or vice versa, strategically).
Playtest Relentlessly: Economies are emergent. You won't know the real balance until players optimize.
Soft vs. Hard Currencies
Hard currency: Difficult to get, premium, often monetized. Real-money purchases, rare drops.
Soft currency: Easy to get, common, earned through play. Gold, experience.
In F2P design, the relationship between hard and soft currencies is the business model. Handle with ethical care.
Single-Resource vs. Multi-Resource
Single-resource economies are simpler:
- One thing to track
- Clear value
- Limited depth
Multi-resource economies add complexity:
- Trade-offs between resources
- Conversion decisions
- More possible strategies
- Harder to balance
More isn't always better. Some videogames thrive on elegant single-resource economies (Into the Breach: just managing unit positioning).
Closed vs. Open Economies
Closed: Fixed resource pool. What exists is what exists. Zero-sum.
Example: Chess - pieces don't regenerate.
Open: Resources generated over time. Not zero-sum.
Example: Most RPGs - gold keeps dropping.
Multiplayer consideration: Open economies in multiplayer create inflation over server lifetime. Closed economies create scarcity competition.
Videogames to Study
- Universal Paperclips - Economy as the entire game. Watch resources transform and compound.
- Animal Crossing - Soft economy with real-time gates. Turnip market as emergent trading system.
- The Sims - Multi-resource economy (money, needs, relationships, time). Competing sinks.
- Eve Online - Player-driven economy at massive scale. Real inflation, real market crashes.
Exercise: Economy Mapping
Map the economy of any videogame:
- What are the resources?
- What are the sources for each?
- What are the sinks?
- What are the converters?
- Are flows balanced?
Diagram it. Then play more and see if your map was accurate.
Why Teach This
Economy design is where videogame design meets systems thinking. Students often start by adding currencies without understanding flows. This leads to inflation, dead currencies, and economies that don't serve gameplay.
Teaching economy mapping before economy design prevents these mistakes. We often use board videogames to teach this before moving to digital - the systems are more visible.
Common Misconceptions
"More currencies = deeper economy"
Students add currencies because they seem "RPG-like." But currencies without meaningful sinks become clutter. Teach subtraction before addition.
"Balance means equal numbers"
Economy balance isn't about making all resources equivalent. It's about creating flows that support the desired experience.
Assessment
- Can students identify sources/sinks/converters in an existing videogame?
- Can students predict what happens when a flow is disrupted?
- Can students design an economy that creates a specific experience (scarcity, abundance, trade-offs)?
Teaching Exercise: Economy Breaking
Take a working economy. Introduce one change (double a source, halve a sink, add a converter). What happens? Play it forward.
This builds intuition for systemic effects.
Key insight: Economies are feedback systems. Change one part, the whole system responds.
Key References
Joris Dormans - Game Mechanics: Advanced Videogame Design. The Machinations framework for diagramming economies. Essential reading.
Raph Koster - Writings on virtual economies. The insight that player behavior in economies is economically rational, even in videogames.
Real economics - Videogames are simulations of economic behavior. Supply and demand, marginal utility, inflation - these concepts apply directly.
The Systems Lens
Economies aren't designed by tuning individual numbers - they're designed by understanding flows. A single number change can cascade through the entire system.
Ethical Considerations
Exploitative economy design - Economies designed to frustrate players into spending money. This is skilled work, but ethically troubled. The same techniques that create satisfying economies can be weaponized.
Unresolved Questions
- How do we design economies that are satisfying but not exploitable?
- What's the relationship between videogame economies and real economic intuitions? Do videogames teach economic thinking?
- How do we balance player expression with economic coherence in multiplayer?
Related
- Player Psychology - economies are loop systems; why resource gathering feels good
- Progression Systems - economies drive progression
- Balance Philosophy - balancing economies
Glossary Terms
- Source - where resources come from
- Sink - where resources go
- Inflation - too much resource generation
- Soft Currency - easily obtained in-game currency