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I may be running a game of 7th Sea in the near future, and one of my players is looking to create a self-styled "king of the vagabonds." He found the Scoundrel advantage, and feels that his character should be looking to collect negative reputation to represent the character's underworld reputation.

I'm fine with the idea of a well-known thief as a player character but I'm confused as to how best to handle the reputation... Whether to give him positive reputation with a "criminal" roleplaying slant, or to give him negative rep.

The books seem a little vague on this point:

The Scoundrel advantage is very clearly an advantage for player characters (in the players' handbook).

The reputation system references "Villains (and Scoundrels)" in a couple of places, implying that a scoundrel isn't a villain.

On the other hand...

The reputation sections of the book make negative rep out to be pretty bad stuff. The "depths of depravity:" razing villages, murdering town guards, and so on.

There is a recommendation to convert heroes to NPCs at -30 reputation.

Scoundrel is MUCH cheaper than Citation (the positive reputation equivalent). While citation costs 4HP for 10 reputation, Scoundrel costs 3HP for -10 reputation and a 2HP skill. It's effectively one quarter the cost of positive reputation.

How is this supposed to work? Positive reputation with a "criminal" roleplaying slant, or give him negative rep?

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Bear in mind that 7th Sea advantages are often about spotlight time -- if an advantage is a disadvantage in game world terms, but it will still give the character more attention at the game table, it's an advantage. I think Scoundrel is one of those advantages, which is why it's relatively cheap.

But if the character plumbs the depths of depravity, he's still going to turn into someone who's reviled. The game world effects are very bad and, as the recommendation on -30 reputation implies, they're untenable in the long term. Scoundrel is intended for someone who's a bit shady and doesn't mind suffering the consequences in exchange for more attention from the GM, rather than being a career path. Negative reputation means people don't like him, and I wouldn't avoid that by letting it be positive in certain circles. The people who like him would be the people who show up and ask him to go burn down an orphanage with them and get offended when he says no.

Thus, I'd go for reflavoring Citation. If he wants the underworld to like him, that's positive reputation. Call it Charming Scoundrel or some such, perhaps.

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In my experience, the 'Scoundrel' advantage is at odds with what the rest of the game wants to do with Reputation. The rest of the game wants to push the players to doing heroic acts instead of villainous acts (just as you quoted: the recommended NPC-ifying of a player with -30 Reputation, the terrible things you can do to give yourself negative reputation, etc.)

The mechanical reason to take the Scoundrel advantage is that at -10, you get a Reputation Die. In our group, Avalonian Glamour users were particularly likely to take Scoundrel because Reputation Dice can be used to power Glamour magic:

Apprentice Degree: The Blessing of Renown. At this level of mastery, you get two benefits. First, all your Reputation Dice are considered Glamour Dice. (Player's Guide, p201)

However, as they then play the game, everything else in the game conspires to increase their reputation, and as soon as they gain even one point, their reputation goes to -9, and they lose that die, not to regain it again until it finally reaches +10.

There are two ways we found to combat this. The first is to have the players with Scoundrel deliberately conspire in-game to have people not notice them doing heroic things, and/or to spread rumors (false or exaggerated) of themselves doing villainous or scoundrel-y things. This can get a little awkward, but can work to push the narrative in interesting directions, if that's the sort of story you want to tell.

The second is to introduce a simple house rule: decouple negative reputation and positive reputation (think the parallel 'Paragon' and 'Renegade' tracks in Mass Effect). Here, your player with Scoundrel starts off with 10 negative and 0 positive reputation points. When they do something heroic, they gain Positive Reputation points, and when they do something villainous (or there are rumors of them doing something villainous) they gain Negative Reputation points. If they get too close to 30 on the Negative Reputation scale, they can choose to cancel some of those points with points from the Positive Reputation scale.

In-world, the PC simply has a mixed reputation: people have heard both good and bad things about them. Stories of both power their increased reputation, which can be channeled into social scenes and glamour magic via Reputation Dice.

The advantage of doing it this way is that the 'Scoundrel' advantage is mechanically identical to the 'Citation' advantage, but better skinned to match the character's backstory.

I realize this answer is a few years out of date, but hey, gotta be some die-hard fans out there still playing...

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Other than taking a Hubris as an Arcana, 7th Sea does not deal in disadvantages. You may buy things that add drawbacks, but those drawbacks are a cost reduction to a minimum of 1. Take for example "Old Age" and "Sidhe Blood". So for the advantage of starting with a rep die, you need to make some choices like if you want to spend the saved points on Scarovese to keep your character longer by enhancing your infamy, or if you want to lose that rep die fairly quickly with your first good deeds.

If you want the skills you can break University, Academy, and Linguistics pretty easily as well.

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