Sometimes it is unintentional. Maybe we as designers overvalued a particular stat during design, like early stamina on wow gear, making that gear less desirable. Sometimes there's a bug in the item itself that makes it not work as intended, like the Pendant in Faxanadu which has an accidental negative multiplier on the stat boost, making it reduce attack power instead of increase it.
Most times it is intentional. Item quality can't exist in a vacuum. An item can only be good or bad relative to the other items it is compared to. Evaluating items is a skill that we game designers must cultivate in players so they can distinguish good items from bad. That can only exist when there are good and bad items to distinguish from each other. Some things are genuinely intended to be weaker than others in order to provide contrast - this sword is really good, because the other options in its level class are bad in comparison to it. This spell is good because it provides the best overall damage per magic point spent to cast it.
This means that players who know how to evaluate items get an additional feeling of appreciation when they find a new item and realize it is a good one. Finding a good item feels better than finding an ordinary item. This is another element of cultivating player skill through intentional design.
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