As I see it, there should be no "shoulds" at all with respect to what characters have besides their bones (i.e. character abilities) and any mundane equipment necessary for them to function.
In the end magic items are just character abilities obtained by other means, so if they have an impact I think it should be on that level. I mean, what is the value of a flaming sword? The answer to that is pretty close to what it would be worth to a monk to make sure his fists were on fire. The common ways we measure character power are levels, or depending on the design of 5e perhaps closer to feats. Either way, those are the scales on which magic items have value for characters, so that's how I'd assign value to them.
So perhaps magic items could be valued by "quarter-levels" or similar. The value of a level is not constant, which suggests items should scale appropriately for the user. This is a concept already desired by some for other reasons. Should a +5 sword be a +5 sword in the hands of a villager? Maybe for them it's a +1 sword because that's all they can handle. (Items with pluses are the worst offenders, but the point stands for all sorts of other things.)
Many items would probably be 0 levels, especially if the primary benefit is an additional option rather than raw power. (For example, a ring that lets one change fire damage to electricity damage. Useful, but it doesn't really change the raw power of the group.) If the DM feels a certain mass of 0 level items is really making a difference to the PCs he can feel free to bump things up a bit, just like he's always judged such things.
You could also handle things like consumables, rituals, and other items that make a big difference when used, but almost no difference by possessing. Maybe a potion of Storm Giant Strength counts as +1 levels for a character that uses it before a combat. The DM might count it for the purposes of distributing XP after the fight. The point is, however, the amount of stuff a party has is quite a bit different than what it benefits from. Wealth-by-level using gold can't handle this at all. It also makes players reluctant to spend gold on anything but more items.
Finally, one can think of extending the same idea to other unrelated areas of the game. For example, the ideal for most modules is probably to leave game balance essentially unchanged. However, some modules inevitably will not do so. The party might still be on the same footing with respect to one another, but in some cases might change how powerful they are with respect to monsters. Well, if a module makes the party a little hardier at all levels (say more hit points and generous death-and-dying rules) the game can give some advice about how this affects the strength of the party. The DM can use that information in the same we he might consider magic items.
Another possibility is attrition as the day goes on. Guidelines for measuring party strength usually take no consideration of whether the party is fresh or worn down. An appropriate challenge at the start of the day might be deadly after 3 fights. If the purpose of such systems is to help the DM set up fights that challenge characters the way she wants them to be challenged, that should be a goal. And if XP takes into consideration the challenge overcome, there might be a small incentive for players to press on rather than rest up. In a 4e context, for example, one might count how many daily powers and healing surges have been spent, and reduce the effective party level by a bit for future encounters that day. That's book work, but one might design 5e so that information could be gathered quickly or simply estimated well-enough to give the DM something to go on besides their "gut."
In the end magic items are just character abilities obtained by other means, so if they have an impact I think it should be on that level. I mean, what is the value of a flaming sword? The answer to that is pretty close to what it would be worth to a monk to make sure his fists were on fire. The common ways we measure character power are levels, or depending on the design of 5e perhaps closer to feats. Either way, those are the scales on which magic items have value for characters, so that's how I'd assign value to them.
So perhaps magic items could be valued by "quarter-levels" or similar. The value of a level is not constant, which suggests items should scale appropriately for the user. This is a concept already desired by some for other reasons. Should a +5 sword be a +5 sword in the hands of a villager? Maybe for them it's a +1 sword because that's all they can handle. (Items with pluses are the worst offenders, but the point stands for all sorts of other things.)
Many items would probably be 0 levels, especially if the primary benefit is an additional option rather than raw power. (For example, a ring that lets one change fire damage to electricity damage. Useful, but it doesn't really change the raw power of the group.) If the DM feels a certain mass of 0 level items is really making a difference to the PCs he can feel free to bump things up a bit, just like he's always judged such things.
You could also handle things like consumables, rituals, and other items that make a big difference when used, but almost no difference by possessing. Maybe a potion of Storm Giant Strength counts as +1 levels for a character that uses it before a combat. The DM might count it for the purposes of distributing XP after the fight. The point is, however, the amount of stuff a party has is quite a bit different than what it benefits from. Wealth-by-level using gold can't handle this at all. It also makes players reluctant to spend gold on anything but more items.
Finally, one can think of extending the same idea to other unrelated areas of the game. For example, the ideal for most modules is probably to leave game balance essentially unchanged. However, some modules inevitably will not do so. The party might still be on the same footing with respect to one another, but in some cases might change how powerful they are with respect to monsters. Well, if a module makes the party a little hardier at all levels (say more hit points and generous death-and-dying rules) the game can give some advice about how this affects the strength of the party. The DM can use that information in the same we he might consider magic items.
Another possibility is attrition as the day goes on. Guidelines for measuring party strength usually take no consideration of whether the party is fresh or worn down. An appropriate challenge at the start of the day might be deadly after 3 fights. If the purpose of such systems is to help the DM set up fights that challenge characters the way she wants them to be challenged, that should be a goal. And if XP takes into consideration the challenge overcome, there might be a small incentive for players to press on rather than rest up. In a 4e context, for example, one might count how many daily powers and healing surges have been spent, and reduce the effective party level by a bit for future encounters that day. That's book work, but one might design 5e so that information could be gathered quickly or simply estimated well-enough to give the DM something to go on besides their "gut."
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