Sources on literacy in Medieval Europe seem to be all over the place, reaching from the popular "Almost nobody could even sign their name" to "There was at least one person in most households who could read and write". Here's a discussion on Stackexchange that lists some sources.
The sad truth is, we may never know how literate people actually were. We can be relatively sure that especially poor people didn't have any formal education and couldn't afford expensive handwritten books. But that doesn't necessarily mean people couldn't read and write at all. A basic level of literacy was useful for a lot of people, especially craftsmen and traders. Not so much that they'd read and write whole books but enough for basic bookkeeping or passing notes to someone who lives in a neighboring village. The thing is, those are not the kind of things that would be preserved until today. Paper and parchment were too expensive for such trivialities but we have evidence from Russia that people wrote everyday correspondence on birch bark. With no need to store these writings, most people would have probably just reused whatever they were written on to light fires or just thrown them outside where they would decompose within a few weeks.
(this kind of ties into a fun fact about why so few authentic chainmail shirts have survived until today. Not because they got destroyed by rust but because after they lost their usefulness in early modern times, they were cut up and reused to scrub pots)
If a family unity could consist of up to 5 or 6, potentially more if it was a multi-generational home, and “at least one person per home” could read, that could be quite a low percentage point.
I guess it depends on what is meant by “almost nobody could read”, since that isn’t an exact figure. Does it mean 1%? 5%? 10%?
I guess they would at least recognize general shape of common words after some time like anyone spending a couple of weeks in a foreign country with a different alphabet would.
The noble and cleric can't read? Classes that effectively have to read in 5e and similar systems:
Bard: plays, music, stories
Cleric: holy texts
Monk: holy texts if they are the monastery type of monks
Paladin: if trained w/clerics or in a temple. not if they are wild-sprouted paladins.
Rogue: thieves' cant, smugglers for manifests, forgery. really just the average cutpurse and enforcer wouldn't need to
Wizard: a nerd's nerd
Many musicians have famously come from poor illiterate backgrounds, being able to play a tune, sing, or recite a story doesn’t require reading skills. It requires good memory to recall what youve heard or creativity to make up something new. So i an totally get behind a bard that cant read.
A "bard" isn't just any musician. They're a highly educated experienced user of language. Telling stories, composing poems & songs, and being in the employ of a noble to do so. In popular culture there's also often the implication that they use these skills and that access to be involved in espionage in some way.
I think Robert Jordan's Wheel of Time series does an especially good job of this. It has gleemen, which are reasonably well-trained in music, storytelling, and other performing arts. Gleemen travel around from town to town making their living playing at taverns and the like. Then a step up from gleemen it has bards, which are more well trained and who perform explicitly for nobles. In either case you can expect a great level of artistic skill, but I'd be shocked to hear of an illiterate bard, but maybe only mildly surprised to hear about an illiterate gleeman.
I know this is a ttrpg community rather than a video game community, but I'd like to chime in and say this is something I really liked about Kingdom Come: Deliverance.
You start off illiterate, but there's a quest to learn to read and afterwards, reading more books and such will improve your reading skills. Starting off, anything you read is literal gibberish, but then it becomes semi-coherent text with typos, and as you progress, it just gets clearer.
I could see this being something you could also incorporate in a ttrpg to add an extra challenge to your players.
There's also something like this in The Outer Wilds. The player character is given a tool to translate the writings of an alien race that's long extinct. In the Echoes Of The Eye DLC you investigate the colony ship of another alien race, but you have no way of translating their writings. Your only option is to infer what happened to them via investigations and by viewing picture slides.
I was not prepared for how significant an impression it would on me to not be able to read everything. This already-spooky new location where all the furniture is distinctly far too big for me suddenly felt so much more alien
I always thought it was a neat touch that all of the writing on walls and non-interactable terminals in Warframe were some space-gibberish that meant fuck-all to me. That's the only other example I can think of.
Fun fact: People could commonly read in the Middle Ages.
There is wide spread belief that medieval Europeans couldn’t read and write, but most peasants could read and write in their VERNACULAR languages. The idea that only 10% of the population could read and write comes from that fact that only 10% of the population could read LATIN, which is the only reading that they thought mattered.
They weren’t wrong to think this too. Latin was one of the only standardized languages due to its use by the church. Vernacular languages varied very widely from place to place, such that it was very common that two peasants from neighboring towns or regions would not be able to understand each other, even if they could read and write some form of “German”.
Most peasant would then be able to read and write their own notes and records, but probably wouldn’t be able to sent letters to next town or read any books.
One example that I mentioned below are letters written on birch bark that were found in several places in Russia: https://en.wikipedia.org/wiki/Birch_bark_manuscript#Old_Slavonic_script. I'm not an expert but from the contents it seems like at least some of the authors were commoners.
Suspension of disbelief is an agreement to change things - but you have to convey that they are changed, or else everyone applies the rules they already know. Healing magic is made-up and can work however you want. Getting stabbed is real. You don't get stabbed and immediately go "guess I'm fine," except through the application of something made-up.
Admittedly, reading is so commonplace now, we assume it's universal. Literacy is the rule we apply by default.
But D&D still specifies which languages your character can speak.
Shadow of the Demon Lord does this. Each language can have speak, read, write. Players have to invest to do these things. it's kind of neat, but I can see it also being pointless book keeping to some.