The hidden exchange rate between your two currencies

Games with a premium currency and an earned currency usually keep them formally separate. Premium buys some things, earned buys others, and there is no exchange between them.

There is always an exchange rate anyway. Wherever both currencies can obtain something comparable, the ratio between the two prices defines a rate — and players discover it, reason with it, and make decisions based on it, whether or not it was intended.

Where the rate comes from

Any item purchasable with either currency sets an explicit rate for that item. Two items of comparable value at different currency prices set an implicit one.

The rate is also set by anything that converts indirectly. If premium currency buys a resource pack and that resource is also earnable through play, the amount of play time the pack replaces is a rate — expressed in hours rather than units, which players are entirely capable of computing.

Time is usually the common denominator. A player evaluating whether to buy something is comparing the price to how long earning it would take. That comparison is the exchange rate as far as the player is concerned, and it applies to every purchasable item regardless of whether the two currencies formally touch.

Why an inconsistent rate causes problems

If the implied rate varies across your catalog, some purchases are much better value than others, and players find the good ones.

The immediate effect is that spending concentrates on whatever offers the best rate, and everything else stops selling. That is not necessarily bad — but it means your catalog is effectively smaller than it looks, and the items with poor rates are occupying space without contributing.

The second effect is on perception. A player who has worked out that one purchase is good value and another is not does not conclude that one item is priced well. They conclude that the poorly-priced item is an attempt to overcharge, and that colours how they read the rest of the store.

The third is that inconsistent rates make your economy hard to reason about internally. If nobody knows what the intended relationship between the two currencies is, every pricing decision is made independently, and independent decisions drift apart. This is how catalogs end up with items whose relative value makes no sense.

Setting the rate deliberately

The useful exercise is to pick a rate and check the catalog against it, rather than to publish it.

Choosing what a unit of premium currency should be worth in earned currency — or, more usefully, in play time — gives every subsequent pricing decision a reference. New items get priced against the rate. Existing items that are far off it get looked at.

The rate does not need to be uniform. There are good reasons for some things to be deliberately better value: an introductory offer, a bundle designed to reward commitment, a first-purchase incentive. What matters is that the exceptions are chosen rather than accidental, and that there is a baseline to be an exception to.

The rate also does not need to be constant across time. A game whose earn rates rise over its life needs its premium prices to move with them, or the rate silently improves and premium purchases stop being worthwhile. This is a slow drift that nobody notices until premium revenue has quietly declined.

See how we keep pricing consistent across a catalog →

The rate players actually compute

Worth knowing: players do not compute the rate in currency units. They compute it in time, and they compute it against their own earning speed rather than an average.

That means the same price reads very differently to a high-efficiency player and a casual one. For an efficient player, the item represents a couple of sessions and buying it is poor value. For a casual player, the same item represents weeks and buying it is excellent value.

This is why the same price converts at wildly different rates across your player base, and why segment-level pricing analysis often shows patterns that look inexplicable at the aggregate level. The item did not change; the exchange rate it represents differs per player because their earning rate does.

The practical implication is that the players for whom your premium prices represent good value are the ones who earn slowly — casual players, newer players, players with limited time. Those are frequently not the players a catalog is designed around, since catalog design tends to focus on engaged high-activity players who are precisely the group for whom buying is worst value.

Checking the implied time cost for a few different play patterns, rather than assuming one, tends to reveal that a catalog is priced for a player who has no reason to buy from it.

Talk to us about currency relationships and pricing →