The Virtual Item Marketplace, Insanity or an Investment?
Video games originated as a simple form of entertainment, games like Pong and Donkey Kong were built upon simple ideas, allowing nearly everyone to play. As technology advanced, so did our entertainment. What was once a simple hobby has become a second life for some gamers, with online worlds reflecting our normal lives in many ways. One feature many online games rely on is the virtual economy, allowing users to strive for financial success both in-game and out.
To the public Virtual Marketplaces are usually seen as a way to purchase physical items from the comfort of your own home, though in the past decade the Virtual item marketplace has exploded. In-game transactions have reached a point nobody could have seen coming with Developer to consumer transactions being worth just short of $50 billion. This figure represents Micro-Transactions available in game, not counting the unprecedented value of consumer to consumer trading.
This consumer to consumer trading is fueled by In-game virtual items, users bank accounts and gambling with the majority of this trading occurring through unofficial and unrecorded means. Allowing users to trade real money for virtual items, essentially creating an in-game blackmarket. These transactions are normally funded by either in-game currency or through money transfer services like PayPal, allowing users to spend thousands on a hat for their character.
These virtual goods in many cases are a rarity, either obtained through in-game real money gambling or pure luck. Most serve no purpose other than their altered appearance, with this in mind it becomes hard to grasp how a flaming hat sold for $24,000. These online marketplaces run quite similarly to a real stock market, supply and demand govern the prices resulting in a huge but relatively stable marketplace. Smart in-game trading has provided some users with the means to quit their day jobs, demonstrating the potential of these markets.
These traders spend their days buying and selling cosmetic virtual items, taking advantage of a thriving online marketplace. It’s hard to grasp that an item used by a video game is worth the same as a new car, though it is. One of the top Steam trader’s ‘Backpack’ is worth upwards of $75,000 USD, a rather daunting number for an inconsequential bundle of pixels.
Cosmetic items are just the start of the online market place, with some games allowing users to trade objects that provide in game advantages, whether they are financial or interaction oriented. Though games that offer these potential perks are often more involved than your standard video game.
Games like EVE Online, Second life and Entropia Universe boast global communities of players, who have invested insane amounts of time into their online counterparts. Because of this many are happy to pay ridiculous sums of money for advantages or to just showboat.
Some of these investments are wise, others are far from it. One example of the later was purchase of a Ship in the space themed MMO EVE Online. The ship in question is considered very rare, being impossible to recreate resulted in only three being available with a street price of $11,000 USD each. The problem with this investment is that EVE Online has player vs player elements, which of course resulted In a very expensive explosion of pixels, permanently losing an $11,000 investment in a 7 minute firefight doesn’t sound ideal.
Footage of the extremely expensive 7 minute firefight.
As some of these prices demonstrate, these virtual marketplaces have huge potential. Entropia Universe has capitalised on the user’s desire for profit, allowing them to directly cash out in game currency to USD. The result of this is huge, with players investing huge amounts of real money in the hope of slowly returning a profit over time through their in-game investments. Unsurprisingly Entropia currently holds the world record for Most Expensive Virtual Property Purchase. In 2011 a company named SEE Virtual Worlds purchased a planet from the developer for $6 Million USD, quite a substantial number for an in-game investment. Initially this number may seem insane, though through in-game taxes and planetary fees the company has the potential to profit off the investment, similar to any regular investment.
These online markets have grown rapidly, these virtual markets are only limited by how much money users are willing to pay for virtual items, which as demonstrated is quite a lot. It is easy to dismiss these purchases as wasteful, many of them are. While this desire for intangible items seems strange from the outside in the community they are status symbols, giving users a way to differentiate their online persona from the crowd. The lack of regulation in these markets can cause issues, but if approached correctly can replace a normal income. These virtual markets give both the developers and savvy users the ability to make money through their hobby, even if it’s done off the books.
Originally published at The Isthmus.