Presentation given at Game Developers Conference 2012 on 7 March. See the notes tab below for partial transcript. Abstract:
Many games today feature virtual money of some sort, whether a "hard currency" sold for real money or a "soft currency" earned through play. The question that this lecture answers is, how do you design money? Not how do players obtain money, nor how do they spend it - but how do you design the money itself. Economists have identified around a dozen attributes of a good money - the kind of money that makes an economy efficient. These attributes make a great guideline for designing serious digital currencies. But in game design, we don't always want things to be efficient - we might want them to be challenging and fun instead. In this lecture, we therefore turn the economists' advice on its head and come up with a guideline for designing "bad money"! Both historical and virtual examples are included.