Dropping Loot
A better approach (IMHO) to loot in RPG games is to give NPCs/monsters actual equipment they can use and then drop naturally. You can combine this with a trinket generator to give each one a little more flavor. Of course some mobs carry stuff they can't use themselves (for example because it is assumed they looted it off someone), that's also fine - just put it into the "character generator" function or the monster template.<p>I'm a huge fan of giving mobs some history and uniqueness, and that's an easy way to do it. A nice side effect is that you don't have to think about loot separately when designing the content, because it comes naturally from the design of the mob. This also means that, by definition, a mob can never drop an inappropriate item.<p>Recently, I re-discovered the ancient Baldur's Gate games (enhanced edition), and they do something similar. Mobs drop the actual equipment they have.<p>Some loot traditionally comes from the body of the monster itself, like a rat's tail or a wolf's fur which you can bring to the next merchant or quest-giver for reward. A more natural method of doing it would be solely through the skill/crafting system, instead of dropping pre-defined animal parts just because they happen to be important to some quest.