A game apparatus includes a CPU, and the CPU displays a difficulty level setting screen on a second LCD prior to a start of the virtual game. On the difficulty level setting screen, a player sets a difficulty level so as to be higher or lower than an initial value by using coins that a player character obtains by playing a virtual game. For example, in a case that the difficulty level is high, the virtual game is made difficult, but a possibility of obtaining a rare item is made high. On the other hand, in a case that the difficulty level is low, the virtual game is made easy, but a possibility of obtaining a rare item is made low.