Economy

Video Game Currencies: An In-depth Guide

BY Jaber Posted August 10, 2023 Update August 14, 2023
Video Game Currencies: An In-depth Guide

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Table of Contents

Introduction

Whether you're an avid gamer or a casual player, you've likely encountered video game currencies. These virtual monies drive engagement, encourage participation, and sometimes, even real-world profits. In this comprehensive guide, we'll dive deep into the world of video game currencies, their importance, types, and the unique economies they create.

The Importance of Virtual Currencies in Video Games

Player Engagement

Game currencies are more than just digital coins or points; they're integral for keeping players engaged. They provide incentives by rewarding players for completing tasks, progressing through levels, and offer a means for players to acquire in-game items or services.

Monetization

Virtual currencies often form a vital part of a game's monetization strategy. They allow for microtransactions, where players can purchase in-game currency with real money to fast-track their progress or acquire exclusive items.

Types of Video Game Currencies

Soft Currency

Soft currency is typically the kind that players earn by simply playing the game, completing quests, or reaching certain milestones. While this type of currency is relatively easy to acquire, its uses can be limited.

Hard Currency

Hard currency is a different beast altogether. This type of currency is usually purchased with real-world money or earned through specific, often challenging achievements in the game. It's often used for premium items or services in the game, or to bypass certain time-consuming elements.

World of Warcraft: Gold

Gold is the bread and butter of the World of Warcraft universe. Earned through quests, looting enemies, or trading goods in the auction house, Gold is critical for purchasing gear, learning new abilities, and much more.

Fortnite: V-Bucks

In the world of Fortnite, V-Bucks rule. Players can earn a limited amount through gameplay, but they can also purchase more with real-world money. These can then be used to buy cosmetic items, battle passes, and other enhancements.

Elder Scrolls Online: Crowns

In Elder Scrolls Online, players use Crowns as the hard currency. Crowns are bought with real money and are used to purchase exclusive in-game items, services, and DLC content.

The Economics of Virtual Currencies

Inflation

Inflation isn't a concept exclusive to the real world. Video game economies can and do experience inflation, often due to an oversupply of currency from exploits, cheats, or poor design decisions. This can lead to increased prices and, consequently, a less enjoyable gaming experience.

Microtransactions

Loot Boxes

Loot boxes are a type of microtransaction where players can purchase a randomized selection of virtual items. While this has become a point of controversy due to its similarities to gambling, it's still a significant source of revenue for many games.

Blockchain and Video Game Currencies

As blockchain technology continues to grow, it's beginning to have a significant impact on video game currencies. Blockchain provides a decentralized and secure method for handling video game currencies, potentially offering new methods for earning and trading them.

Earning and Trading

Some blockchain-based games, like CryptoKitties or Axie Infinity, allow players to earn in-game assets or currencies that can then be traded on blockchain marketplaces for cryptocurrency. In some cases, these assets can also be sold for real-world money.

Ownership and Security

Blockchain also provides more secure ownership of in-game assets. Because each transaction is recorded on the blockchain, it's easy to verify who owns a particular asset. Additionally, blockchain's decentralized nature makes it more difficult for hackers or cheats to manipulate game economies.

Ethical Concerns with Video Game Currencies

Despite their importance and popularity, video game currencies can also raise ethical concerns.

Addiction and Overspending

Microtransactions and loot boxes can sometimes lead to addiction and overspending, as players might feel compelled to keep buying in hopes of getting rare items. This is particularly concerning for younger players who might not fully understand the implications of these purchases.

Real-world Impact

Virtual economies can have real-world consequences. For example, some players might spend countless hours grinding for in-game currency or even spend large amounts of real money. This can lead to issues like gaming addiction, financial problems, and even mental health issues.

The Future of Video Game Currencies

As technology continues to evolve, so too will video game currencies. Blockchain is already changing how these currencies are earned, spent, and traded, but this is likely only the beginning.

Cross-game Currencies

One potential development is the advent of cross-game currencies. This would allow players to earn currency in one game and spend it in another. This could potentially lead to an entire ecosystem of interconnected games and virtual economies.

More Real-world Integration

We may also see more real-world integration with video game currencies. While many games already allow players to buy in-game currency with real money, future games might offer more ways for players to earn real money through gameplay.

Conclusion

From their role in player engagement and game monetization to their potential future developments, video game currencies are a fascinating and integral part of the gaming industry. As technology continues to evolve, it's likely that video game currencies will continue to change and grow, offering new opportunities and challenges for players and game developers alike.

FAQs

Can blockchain technology influence video game currencies? Absolutely, blockchain can provide a decentralized and secure method for handling video game currencies and could offer new ways for earning and trading them.

Are there ethical concerns associated with video game currencies? Yes, concerns have been raised about addiction, overspending, and the potential real-world impact of video game currencies.

What could be the future of video game currencies? Future developments may include cross-game currencies, more real-world integration, and further advancements with the use of blockchain technology.

Are there games where I can earn real money? Yes, some blockchain-based games allow players to earn in-game assets that can be traded or sold for cryptocurrency or even real-world money.

How does video game inflation occur? Game inflation can occur due to an oversupply of in-game currency, often resulting from exploits, cheats, or poor design decisions. This can lead to higher in-game prices.

Can I earn video game currency without playing? In most games, you have to actively participate to earn the in-game currency. However, some games may offer passive ways to earn, like owning in-game businesses.

What happens to my game currency when I stop playing? The currency typically stays in your game account and will be there if you decide to return to the game. However, it's best to check the game's terms of service as policies can vary.