A lot of what I would have said has been said all ready.

TLDR, go for it.

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Original post by thekaiz If you are targeting hardcore strategy gamers... it adds a whole new dimension of strategy, the ability to manipulate, and create. Trust me on this one, they will love it. What does it take away? Those who want simple games, they are not fun to play with anyway, they are the same type that use cheat codes.

Adding more "stuff" to a game does not automatically guarantee more strategic choices! What it does guarantee is that the player would have to work more. Chess is a "simple" game. There is a 8x8 square grid and just 6 unique pieces. But it is immensely deep. (unfortunately, people like to use cheat codes like "Deep Blue")

For example, imagine an MMORPG where players have these stats : Strength, Agility, Constitution, Luck, Charisma, Dexterity, Piety, Intelligence, Wisdom, Speed, Focus, Aptitude, Flexibility, Reaction, Endurance,.... + 15 others. Sure, they add a lot of "dimensions" and allow extreme fine tuning of your character. But is it worth making the player work this hard?

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Original post by Matias Goldberg In the past, hard-to-find metals (like gold) was worth, not to mention they were very handy. [...] Later appeared money; which had the same system we currently use (and hasn't changed much since then): Sheets of papers are print with a number telling how much they were worth. Why people wanted those sheets of papers?? Because someone (at that time, they were feudal lords. Today in the US, the federal bank, in my country Argentina it's the BCRA) backed up that paper with gold (or a similar metal).

It was a bit different. To start with, "money" isn't just paper money, but also "coins". The difference between "coins" and "gold" is that a coin has an imprint which guarantees that this piece of gold has a certain purity and a certain minimum weight. With early coins, coin clipping was quite common, effectively subverting this guarantee. This is why coins were later equipped with ridges. Token coins (which are worth less than the value imprinted, most coins in existence today) are a much later invention.

Paper money, on the other hand, was a direct successor of the "lettre de change" which was common in Europe among merchants (not feudal lords) since the early middle ages and which had previously been practice in a similar form for nearly a thousand years in arabian countries.
A lettre de change is, much like paper money, a promise to give change according to the value on the paper, no more. It is by no means a guarantee and it is not backed up by anything but belief. If the debitor can't pay, then you're free to take his house and goods (something that happened regularly at that time), but that's pretty much all get for your money. You can get the debitor jailed (which also happened regularly), but that is a poor compensation.
It is very similar with modern money, except that there are no houses and goods you can claim. If a state can't find creditors any more (which luckily does not happen so often), then your money is simply gone.

With the sole exception of the OPEC states (who still have much more oil than money), this has never been different in any country at any time in history, for the simple reason that there is not nearly enough gold or other precious metal available to pay for everyone's credit. The same is true for every bank in the world.
The gold reserves have merely a symbolic value. If you were worrying about your money, they could say "Look, we have 100 million dollars worth in gold down here, you sure don't own more than that, do you? So rest assured...".
However, if all of a bank's clients ask for their money, they won't be able to deliver, none of them. This is why a "bank run" is so devastating, too. A perfectly healthy bank can go bankrupt within hours if they lose their customers' trust, even if it is for entirely idiotic reasons.
It is none different with nations, only on a larger scale - the value of money is solely based on trust, not on value.

Wanted to say thanks for the thoughts so far. You guys have given me alot to think about.

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Original post by Girsanov For example, imagine an MMORPG where players have these stats : Strength, Agility, Constitution, Luck, Charisma, Dexterity, Piety, Intelligence, Wisdom, Speed, Focus, Aptitude, Flexibility, Reaction, Endurance,.... + 15 others. Sure, they add a lot of "dimensions" and allow extreme fine tuning of your character. But is it worth making the player work this hard?

Although I'm not an MMO fan, I'm definitely an RPG fan, so hopefully this reasoning holds: Everything would depend on the audience, the feel that you're going for, and the amount of variety of encounter these stats would allow for.

The central strategy for most games is to kill stuff, and every oblique activity you undertake (mining, crafting, NPC influencing) is usually solely in service of this goal. You can test this by asking whether or not it's possible to play a purely non-combat character through the entire game. So if this is the case, then no there's probably no point to having 30 stats.

If, OTOH, the game has more goals and more ways to achieve them, more stats make sense. Civilization is an example: Gold, culture, production value per city, science production, happiness, resources, etc.

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From a Game Design point of view the question would be : What does multiple currencies add to your game? What does it take away? (e.g. convenience)

It might add yet another way to succeed in the game as well as a sense of veracity (not realism, but that hard to define quality that makes the game more believable). It might also offer something else to do, which is rarely a bad thing.

I'm not sure convenience is automatically loss, particularly if there is enough automation. The learning curve would definitely increase, and there's certainly a risk of yet another point of imbalance in a game that's already hard enough to try to balance. So you make a very good point.

My point is this :

One cannot say whether a particular feature (currencies, banks, more stats etc) will add or remove more strategic choices from a game. It is simply wrong. It is how these features are implemented that will affect their efficacy.


Example (from my experience with Sins of a Solar Emprie) :

An RTS that allow you to research the ability to mine resource A or resource B. Going either route do not unlock any new technology. The map is always randomly generated with only resource A or B. Resource A and B can be transformed into each other easily.

Since the map is always stocked with one type of resource, there is really no strategic choice here. Players always pick the one the map has. Furthermore, A and B can be interchanged easily and offers no new tech when specialized. So the whole system of having two resources adds nothing but complexity.

An example with Currencies :

A space trading game where different region uses different currencies, whose value fluctuate randomly. So when trading goods from point A to point B, instead of checking whether the price at A is lower than at B, a player now factor in currency differences.

You might make currencies fluctuate based on predictable events that players can exploit. But the same thing can already be done using events that influence the prices of goods in a region.

There is no real strategic choice added to the game. It is still "check profitability then grind/trade".

I have forgotten about this thread!

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Original post by samoth Paper money, on the other hand, was a direct successor of the "lettre de change" which was common in Europe among merchants (not feudal lords) since the early middle ages and which had previously been practice in a similar form for nearly a thousand years in arabian countries. A lettre de change is, much like paper money, a promise to give change according to the value on the paper, no more. It is by no means a guarantee and it is not backed up by anything but belief. If the debitor can't pay, then you're free to take his house and goods (something that happened regularly at that time), but that's pretty much all get for your money. You can get the debitor jailed (which also happened regularly), but that is a poor compensation. It is very similar with modern money, except that there are no houses and goods you can claim. If a state can't find creditors any more (which luckily does not happen so often), then your money is simply gone.

I hope you expect my apologies, because indeed samoth right. I talked about paper money when I was actually talking about coins.
Paper money appeared later, which were, like his says a "lettre de change" (you could think it similar to a check).
The real origin is always debated, as it may have been used long long time ago, and there are some records of similar practices. But it became more often and evolved into what we know today since then.

Hopefully my economic history (not to confuse with history of economics) teacher doesn't visit this site often or he would have cut my head off.

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Original post by samoth The gold reserves have merely a symbolic value. If you were worrying about your money, they could say "Look, we have 100 million dollars worth in gold down here, you sure don't own more than that, do you? So rest assured...". However, if all of a bank's clients ask for their money, they won't be able to deliver, none of them. This is why a "bank run" is so devastating, too. A perfectly healthy bank can go bankrupt within hours if they lose their customers' trust, even if it is for entirely idiotic reasons

[Offtopic]Well that has more to do because of the so-called secondary money and the reserve requirements, but you're right about the devasting effects of bank runs[/Offtopic]
To put it short on bank runs, banks are like public toilets. A big buildings with 500 hundred employees has a set of 8 toilet cubicles in each toilet. This is because it was built with the assumption that the 500 employees won't requiere to use it at the exact same time.

He is also right about the importance of trust.

This is because, when you deposit your funds in the banks, the banks makes loans with part of your money to get profit.
When you withdraw the 100% of your money, the bank uses money deposited from multiple accounts (or multiple loans were just paid) and give you your money.
When people starts distrusting a bank:
a) If all of the bank's clients want to withdraw their money, the bank just won't be able to fullfil that request, because it has given loans with your money!
b) If the bank foresees such situation, it can increase their reserves; which means they creates loans with less % of your money. This means less profit for the bank.

In both a) and b), the lost of trust is terrible for a bank.
When a country loses trust, it is terrible in a much bigger scale.
Inflation appears, the exchange rates goes up, the federal reserve probably diminishes, capital outflow starts to happen.

In summary if you plan to include currencies into game design you should take the following in mind:

a) Some goods are more viable to become currencies than others. (the diamond example)

b) Most countries should really back up their currencies. Even if that means millitary power (ideas for the game...), magic power reserve, etc. Edit: Countries could also lie... (specially if they're not under another powerful country supervision, or aren't part of an international agreement).

c) The trust upon the currency and the nation behind it (i.e. if in b) someone thinks the country doesn't have enough millitary power as they used to be...)

d) How much value it has to the person who helds that currency in his hand, taking the 3 factors above into account.

e) Countries with higher exchange rates are more competitive than those with low exchange rates. Why? Suppose someone willing to work for 1000 MU (monetary units). Let's assume those 1.000 MU are worth the same within their country. They eat one day with 10 MU, they both pay bills with 300 MU, etc.
Then someone comes with dollars.

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Country A U$S 1 == 2 MUA; Country B U$S 1 == 1.2 MUB.

Let's say a TV is worth 500 MU in both countries.

Obviously the guy from the US would prefer to buy stuff from Country A as the TV is worth U$S 250, while if he had to buy it from Country B, he would need to pay U$S 416.67

Of course life isn't so simple, because country B can be more competetive on i.e. the technological side (i.e. he can manufacture a TV for 250 MU, which is U$S 208.33) So that:

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Country A TV: U$S 250.00 (500 MUA) Country B TV: U$S 208.33 (250 MUB due to technology changes)

But again, country A can buy more dollars in an attempt to raise the exchange rate and stay competitive. If it succeeds, so that now U$S 1 == 3 MU; the TV from country A would still cost 500 MUA as opposed to country B's 250 MUB, but it would be U$S 166.67 vs U$S 208.33, making country A the right choice again:

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Country A TV: U$S 166.67 (500 MUA) due to exchange rate changes Country B TV: U$S 208.33 (250 MUB)

This is not only important for import and exports.
This attracts foreign investors: it's cheaper to put a TV manufacturing company in country A rather in B (assuming local costs and technology are very similar).

f) In the example of E); there are two more factors in mind: Shipping and inflation.
I think the Shipping is obvious. The more expensive the shipping from one country is, the less competitive it is. Distance, volume of exportation, and technology have an influence here.

The inflation is often used to define the "real" exchange rate. That is, exchange rates with the effects of the inflation ripped off.

Suppose Country A has a monthly inflation of 300%. This means the TV will worth 1500 MUA

This now makes U$S 500 vs U$S 208.33; making country B the right choice.
The exchange rates would still be U$S 1 == 3 MUA, U$S 1 == 1.2 MUB; but the so-called "real" exchange rate would be

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U$S 1 == 3.0 / 300% -> U$S 1 == 1.0 MUA / Inf U$S 1 == 1.2 / 100% -> U$S 1 == 1.2 MUB / Inf Country A TV: U$S 500.00 (1500 MUA due to inflation) Country B TV: U$S 208.33 (250 MUB)

Countries that depend on exchange rates to stay competitive are often (IMHO here) digging their grave; as exchange rates may extremely volatile, depend on many uncontrolled factors.
Focusing on technological improvements, manpower efficiency, marketing strategies are other ways to stay competitive. Not just in price but in quality.

g) Last but not least, keeping the previous example without the inflation thing, so that:

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U$S 1 == 3.0 -> U$S 1 == 3.0 MUA U$S 1 == 1.2 -> U$S 1 == 1.2 MUB

The obvious choice, as said, was country A.
But if it keeps going that way, Country's A exchange rate will soon get lower.
The US will start buying many TVs. This means it has to buy MUAs (by selling dollars), in order to purchase those tvs.
Buying some many MUAs will lower the exchange rate, making Country A to lose competitivity.
This is why exchange rates are not a good long-term strategy to be competetive; unless you have some magical way to mantain exchange rates high indefinately without any side-effect.

Edit (Added): h) Exchange rates are subject to the supply/offer and demand law, as seen in point g), where exchange rates soon lowers as more TVs are exported (because more MUAs are bought).
The more dollars you buy to buy american stuff, the higher the exchange rate gets.
The more dollars are sold to buy Country's A stuff, the lower it gets.

Well, points a) to g) were supposed to be a summary. But I believe they're more useful for you than what I've already said before.
I hope this can work as a little basis for your exchange rate implementation in your game; in the case I haven't frightened you already [lol]
Keep in mind faithful representations of reality may not be fun in games or movies unless done smartly. And can be very hard to achieve too!

Cheers ;)
Dark Sylinc

[Edited by - Matias Goldberg on March 6, 2009 6:56:49 PM]

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Original post by Matias Goldberg e) Countries with higher exchange rates are more competitive than those with low exchange rates.

Japan is the second largest economy in the world.
(http://en.wikipedia.org/wiki/Economy_of_Japan)

1 US Dollar is worth around 98 Japanese Yen right now.
(http://finance.yahoo.com/currency-converter?amt=1&from=USD&to=JPY&submit=Convert#from=USD;to=JPY;amt=1)

The pound is worth around 1.4 US dollars but UK economy is behind that of US or Japan as US is the world's largest economy and Japan second.



Does the above contradict your statement? If not, why?


Although the effects in real life are much more complicated, most introductory economics university courses or textbooks would say that a fall in the value of a country's currency (weaker currency) would improve exports, which benefits the economy.

Weaker currency => cheaper goods => more exports => more income from other country buying their exports.

@Girsanov: It seems some confussion arised with the translation of "high and low" exchange rates.
If we're comparing i.e. US vs Yen, if I say high exchange rates, then I mean the yen currency was deppreciated (got weaker).
This means the Yen worths less than a US.
i.e. U$1 == 100 Yen.

If I say low exchange rates, the Yen currency was appreciated (got stronger), I mean
U$ 1 == 0.5 Yen

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Original post by Girsanov Weaker currency => cheaper goods => more exports => more income from other country buying their exports.

When you say weaker currency, I say high exchange rates. The confussion arose because of a communication issue. Your logic is completely valid.

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Original post by Girsanov Does the above contradict your statement? If not, why?

Don't confuse staying competitive with having a big economy.
The poorest country in the world may be one of the most competitive if we only look at the currencies. Meanwhile one of the biggest country in the world may also be very competitive as well (if we keep only looking at the currencies).
There is a tendency from big economies to have stronger currencies but is not a rule. Your Japan & UK vs US comparision is a clear example that this is not a rule.

I hope this clears your doubts
Cheers
Dark Sylinc

lol yeah, "high/low" exchange rate is a major source of communication confusion in economics discussion!

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Original post by Matias Goldberg Don't confuse staying competitive with having a big economy. The poorest country in the world may be one of the most competitive if we only look at the currencies. Meanwhile one of the biggest country in the world may also be very competitive as well (if we keep only looking at the currencies).

Can you define "competitive"?

I am quite confused. Feel free to use economic lingo, I am familiar with them.

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Original post by Matias Goldberg There is a tendency from big economies to have stronger currencies but is not a rule.

Any evidence?


I have a logical argument against the effect of a weaker currency :

Suppose the US dollar is completely replaced by a currency call X dollars. Each US dollar is instantly, magically, exchanged for 10 X dollars. The prices of all goods are also instantly and magically updated to X dollars. What used to cost US$1 are now costing 10 X dollars.

Now X dollar is a "weaker" currency than US dollars, meaning that it is less valuable since 10 X dollars = 1 US dollars.

However, nothing in the US economy should change since nothing has change except the unit of account.


What I am suggesting is that while a CHANGE in exchange rate would trigger an effect, the actual number itself has no effect.

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Original post by Matias Goldberg e) Countries with higher exchange rates are more competitive than those with low exchange rates. Why? Suppose someone willing to work for 1000 MU (monetary units). Let's assume those 1.000 MU are worth the same within their country. They eat one day with 10 MU, they both pay bills with 300 MU, etc. Then someone comes with dollars. Quote: Country A U$S 1 == 2 MUA; Country B U$S 1 == 1.2 MUB. Let's say a TV is worth 500 MU in both countries. Obviously the guy from the US would prefer to buy stuff from Country A as the TV is worth U$S 250, while if he had to buy it from Country B, he would need to pay U$S 416.67

There is a flaw in this argument.

Suppose a good is worth 1200 MU in both countries. We can buy it in A for US$600. Bring this 1200 MU good to B and exchange it for US$ for US$1000. We make US$400 in arbitrage profit.

Yes, I am talking about Interest Rate Parity.
http://en.wikipedia.org/wiki/Interest_rate_parity