What a GM is to do?
Make a character, of course.
The GM actually has their own character in Ryuutama, the Ryuujin that's following the PCs along and writing down everything that happens, no matter how embarrassing. The Ryuujin also have a number of abilities, some of which depend on which color Ryuujin is chosen to go along with the PCs and the campaign. All Ryuujin can choose from one of three artefacts, which affect the way the game is played, and three unique Benedictions, which are bonuses the they can confer on the group in certain circumstances. There are also powers which all Ryuujin can use, and these powers are cast from the Ryuujin's Life Points- If the Ryuujin's LP reaches zero, it dies forever, and a new one must be assigned to the party.
The game does give some guidelines for the use of Ryuujin in game, in that the Ryuujin's powers shouldn't be used too often (not that this is especially possible, most of the time), nor should the Ryuujin actually appear in person too much. Generally, the Ryuujin should appear once in a while (even if it's just in disguise), but not too much- the role of the Ryuujin is to record the travels of people, not direct them, nor to employ travelers as their own errand-persons.
There are four colors of Ryuujin, chosen depending on the type of campaign.
Green Dragon- The green Ryuujin is pretty much the default for most Ryuutama stories, as these govern stories of travel, exploration, adventure, freedom, that sort of thing. Their three artefacts are the book, which means default rules are in play, the Sextant, which means some house rules are in effect (tell your players what they are!), and the torch, which doubles received XP. Their powers are all about the travel itself, mainly in ignoring negative travel modifiers or status ailments, plus one that gives bonus gold if travelers write about the journey.
Blue Dragon- The Blue Ryuujin is the second most common, as Ryuutama is supposed to be a feelgood game, thank you very much. this one governs stories of family, friendship, love, and community, and its artefacts reflect that. His three possible choices are the crystal, which gives PCs an enormous negative HP buffer, the ring, which determines that all of the PCs are either related (secretly or openly) or classmates, and the Mascot, which allows the Ryuujin to always travel with the PCs in a shapechanged form. His own powers have to deal with temporarily increasing the spirit score or defense points of PCs under certain circumstances, as well as handing out fumble points for moving roleplay.
Red Dragon- The Red Dragon is all about stories of war, glory, life-and-death struggle, valor, those sorts of things, so this stack of goodies revolves around combat. The Greatsword allows twice as many objects to be placed in battle as normal, the Longspear, which determines that all PCs are a member of some army or another, and the longbow, which turns all attacks against PCs into opposed rolls- there is no fixed dodge value. His powers are about increasing strength and such, plus he also has a once-per-campaign power of, while in battle, reviving any dead PCs and restoring all party members to full health.
Black Dragon- The black Ryuujin is the least commonly used, because they tend to cover stories of tragedy, intrigue, madness, mystery, and similar sordid business. Not all of this one's artefacts are helpful to the PCs, as they include the Chalice, which determines that all the PCs have some kind of dark past, the dagger, which, once per campaign, can instantly kill any NPC, and the Mirror, which forces PCs to make a roll every time they experience fear or gain a nasty status ailment. The unique powers allow this Ryuujin to grant players bonuses to rolls when acting out of revenge or cooperation, and even one that allows PCs to regain MP by killing human-sized or larger enemies.
At the beginning, each Ryuujin can only choose one Benediction per session, but that changes as they level up.
Then there are the common Beneditions, which don't need to be slotted, but are generally more expensive in LP- and Ryuujin never really have a huge amount to spare. These govern things like rewinding or fast-forwarding time, changing dice rolls to fumbles or criticals, and even manipulating enemy strength and abilities. There is a second class of common powers called the Réveil, where the Ryuujin takes on a dragon form to bestow some boon or aid to the travelers. the number of these that a Ryuujin can use is limited by level, and they also tend to be on the expensive side, LP-wise. they do have powerful effects, like granting extra food and water, taking damage for PCs, and other adventure aids.
The Ryuujin doesn't level up based on some kind of calculated experience, but rather based on the number of sessions that have been played in the campaign. Levels grant a host of benefits, such as adding new powers, more slots for current powers, being able to take a second artefact, and so on. At max level, the Ryuujin gets to use Ritual Benedictions, which are actually metagame powers, such as if a player falls alseep at the table, the Ryuujin arranges for the character's wallet to be stolen, or the next session's GM being determined by a game of rock-paper-scissors. My opinion of the latter? Let's not go there, it's a silly place.
Next up: Session creation.
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