How Magic Items Work

I don't like perfect absolutes, so I could see, for example, a bunch of goblins gather dog slicers that were used by 'mighty' goblin heroes, and a conclave of shamen come together on a sacred mountain top, during a confluence of the heavens and they call out to their dark goddess Lamashtu, beseeching their mother for a weapon equal to their need, and with a dark flash of pure divine power Lamshtu smites all the goblins present dead but smoldering in the center of their ritual circle is an artifact level dog slicer. But that doesn't mean if you gather up five +1 daggers you can melt them down into one +3 longsword So I guess the principle is with a cool enough story and some communication/notice we can make just about anything work, but as a DM I do still have to keep in mind some semblance of balance and I'm trying to spread out loot and gear for a trip all the way from lvl 1 to 20 and by RAW (which I'm not playing perfectly as I hope you all have realized by now) gear only goes up to +3 So if we were playing published items only a +1 sword should come along somewhere around lvl 6, +2 around 12, and +3 around 18 or so. Which means craftsmen skilled enough to produce such things should be fairly few and far between even for "just" a +1 and exceedingly rare for a +3
  Item rarities should be viewed as follows: Nonmagical - Anybody from an apprentice to a journeyman with the appropriate skills can produce an item of acceptable quality
  Common - An artisan of above average skills can make these with the right tools, but alot of these barely qualify as 'magic' many of them might just be exceptionally well made from an in universe perspective, and their 'magic' status is just the presence of additional rules. E.G. a piece of jewelry so beautiful that it makes people treat you nicely because they assume you're rich. Mechanically, it can cast the Friends cantrip a number of times per day, but in universe it's not "real" magic
  Uncommon - These are the kinds of items that not just anyone can make and are the floor for "real" magic. It takes a life of dedication to a craft to learn how to make them, but they can still be learned sort of like a recipe. "Do these things perfectly, in this order, and you'll produce this item"
  Rare - This is the tier where the "recipe" method begins to fail, the magicks being manipulated almost seem to have a mind of their own. A masterful craftsman might be able to make the same thing twice, but not by just doing what they did the first time. He has to recognize that he's not doing the same thing with the same raw materials. He has to account for the fact that this iron came from a bog instead of a mine. Even if it's an iron billet of the same purity, taken from the same mine, was it mined at the same time of year, was the phase of the moon the same? Was it mined by the same dwarf? Handled in the same way? These things must be accounted for and the craftsman must make the adjustment or the magic wont take
  Very Rare - We have nearly hit the peak of mortal achievement. These kinds of items are literal "masterworks" once in a lifetime pieces that the artisan for all his skill will never make again, and possibly never equal no matter how much they try, many even step away from their craft for this reason
  Legendary - A mortal might be able to create such a thing, but usually these are magic items that have grown into legends and draw more power from said legend rather than having been forged that way from the start. EG a +3 longsword gets used by a paladin to defend a site holy to his god against an endless undead horde might turn into a Holy Avenger. The direct crafting of such items almost certainly requires at least the tacit approval of a supernatural being of sufficient power, possibly even their direct involvement.
  Artifacts - The creation of these are the domain of Greater Deities alone. They are often kept in divine armories located on the outer planes. Their very existence is often a danger to the multiverse in some form or fashion. Some even represent fundamental forces or rules of the universe that even the gods must acknowledge/obey (edited)

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